FB Bancorp (FBLA) S-1 IPO registration

Exhibit 99.3

FinPro Capital Advisors, Inc. 46 EAST MAIN STREET • SUITE 303 • SOMERVILLE, NJ 08876 • P: (908) 234-9398 AS OF FEBRUARY 14, 2024

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Conversion Valuation Appraisal Report

Table of Contents

Fidelity Bank

TABLE OF CONTENTS	1
INTRODUCTION	3
1. OVERVIEW AND FINANCIAL ANALYSIS	6
GENERAL OVERVIEW	6
HISTORYANDOVERVIEW	6
STRATEGIC DIRECTION	7
BALANCESHEETTRENDS	7
LOAN PORTFOLIO	11
INVESTMENTS	12
ASSETQUALITY	14
FUNDINGCOMPOSITION	15
ASSETLIABILITYMANAGEMENT	16
CAPITAL	17
INCOMEANDEXPENSETRENDS	17
LEGALPROCEEDINGS	20
SUBSIDIARIES	20
2. MARKET AREA ANALYSIS	21
3. COMPARISONS WITH PUBLICLY TRADED THRIFTS	22
OVERVIEWOFTHE COMPARABLES	25
4. MARKET VALUE DETERMINATION	27
FINANCIAL CONDITION	28
BALANCE SHEET GROWTH	32
EARNINGS QUALITY, PREDICTABILITYAND GROWTH	34
MARKETAREA	38
CASH DIVIDENDS	39
RECENT REGULATORY MATTERS	40
5. OTHER FACTORS	41
MANAGEMENT	41
LIQUIDITYOFTHESHARES	42
MARKETINGOFTHEISSUANCE	43
VALUATION ADJUSTMENTS	45

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6. VALUATION	46
DISCUSSIONOF WEIGHT GIVENTO VALUATION MULTIPLES	46
OFFERING VALUEIN RELATIONTO COMPARABLES	49
COMPARISONTO RECENT STANDARD CONVERSIONS	51
VALUATION CONCLUSION	52
7. EXHIBITS	53

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Conversion Valuation Appraisal Report

Introduction

February 14, 2024

Board of Directors

Fidelity Bank

353 Carondelet Street

New Orleans, LA 70130

Members of the Board Directors:

At your request, FinPro Capital Advisors, Inc. (“FinPro” or “FCA”) has completed and hereby provides an independent appraisal (“Appraisal”) of the estimated pro forma market value of the common stock which is to be issued in connection with the mutual-to-stock conversion transaction described below.

This Appraisal is furnished pursuant to the requirements stipulated in the Code of Federal Regulations and has been prepared in accordance with the “Guidelines for Appraisal Reports for the Valuation of Savings and Loan Associations Converting from Mutual to Stock Form of Organization” (the “Valuation Guidelines”) of originally issued by the Office of Thrift Supervision (“OTS”) and accepted by the Federal Reserve Board (“FRB”), the Office of the Comptroller of the Currency (“OCC”), the Federal Deposit Insurance Corporation (“FDIC”), Louisiana Office of Financial Institutions and other state banking regulatory agencies, and applicable regulatory interpretations thereof.

Description of Plan of Conversion

The Board of Directors of Fidelity Bank (“Fidelity” or the “Bank”) has adopted the plan of conversion (the “Plan”); whereby the Bank will convert to stock form. As a result of the conversion, the Bank will convert to the stock form of ownership and issue all of its common stock to a to-be-formed holding company called FB Bancorp, Inc., a newly formed Maryland corporation, (“the Company”). It is our understanding that the Bank will offer its stock in a subscription and community offering to Eligible Account Holders, to the Employee Plans and to Supplemental Eligible Account Holders of the Bank. To the extent that shares remain available for purchase after satisfaction of all subscriptions received in the subscription offering, the shares may be offered for sale to members of the general public in a direct community offering and/or a syndicated community offering. A portion of the net proceeds received from the sale of the common stock will be used to purchase all of the then to be issued and outstanding capital stock of Fidelity and the balance of the net proceeds will be retained by the Company.

At this time, no other activities are contemplated for the Company other than the ownership of the Bank, a loan to the newly formed ESOP and reinvestment of the proceeds that are retained by the Bank. In the future, the Company may acquire or organize other operating subsidiaries, diversify into other banking-related activities, pay dividends, or repurchase its stock, although there are no specific plans to undertake such activities at the present time. The plan of conversion will not provide for the establishment of a new charitable foundation.

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Conversion Valuation Appraisal Report

In compiling the pro formas, FinPro relied upon the assumptions provided by the Bank and its agents. The pro forma assumptions are as follows:

• 100.0% of the total shares will be sold to the depositors and public,

• the stock will be issued at $10.00 per share,

• the conversion expenses will be $3.0 million at the midpoint, including the placement agent fee,

• there will be an ESOP equal to 8.0% of the shares sold, funded internally, and amortized over 25 years straight-line,

• there will be an MRP equal to 4.0% of the shares sold, amortized over 5 years straight-line,

• there will be a Stock Option Plan equal to 10% of the shares sold, expensed at $3.72 per option over 5 years straight-line,

• the tax rate is assumed at 19.0%, and

• the net proceeds will be invested at the one-year treasury rate of 4.9%, pre-tax.

In the course of preparing our report, we reviewed the Bank’s financials for the years ended December 31, 2023, and December 31, 2022. We also reviewed the registration statement as filed with the Securities and Exchange Commission (“SEC”). We have conducted due diligence analysis of the Bank and held due diligence related discussions with the Bank’s Management and Board and Luse Gorman, PC (the Bank’s counsel). The valuation parameters set forth in the appraisal were predicated on these discussions, but all conclusions related to the valuation were reached and made independent of such discussions.

Where appropriate, we considered information based upon other publicly available sources, which we believe to be reliable; however, we cannot guarantee the accuracy or completeness of such information. We reviewed the Bank’s primary market area and reviewed the market area’s economic condition. We also reviewed the competitive environment in which the Bank operates and its relative strengths and weaknesses. We compared the Bank’s performance with selected publicly traded institutions. We reviewed conditions in the securities markets in general and in the market for similar institutions in particular. Our analysis included a review of the estimated effects of the Conversion of the Bank on the operations and expected financial performance as they related to the Bank’s estimated pro forma value.

In preparing our valuation, we relied upon and assumed the accuracy and completeness of financial and other information provided to us by the Bank and its independent accountants. We did not independently verify the financial statements and other information provided by the Bank and its independent accountants, nor did we independently value any of the Bank’s assets or liabilities. This estimated valuation considers the Bank only as a going concern and should not be considered as an indication of its liquidation value.

Our valuation is not intended, and must not be construed, to be a recommendation of any kind as the advisability of purchasing shares of Common Stock in the stock issuance. Moreover, because such valuation is necessarily based upon estimates and projections of a number of matters, all of which are subject to change from time to time, no assurance can be given that persons who purchase shares of Common Stock in the stock issuance will thereafter be able to sell such shares at prices related to the foregoing valuation of the pro forma market value thereof. FinPro is not a seller of securities within the meaning of any federal or state securities laws. Any report prepared by FinPro shall not be used as an offer or solicitation with respect to the purchase or sale of any securities.

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Conversion Valuation Appraisal Report

The estimated valuation herein will be updated as appropriate. These updates will consider, among other factors, any developments or changes in the Bank’s financial condition, operating performance, management policies and procedures and current conditions in the securities market for thrift institution common stock. Should any such developments or changes, in our opinion, be material to the estimated pro forma market value of the Bank, appropriate adjustments to the estimated pro forma market value will be made. The reasons for any such adjustments will be explained at that time.

Valuation Conclusion

It is, FinPro’s opinion that as of February 14, 2024, the estimated aggregate pro forma market value of the Bank was $150,000,000 at the midpoint of a range with a minimum of $127,500,000 to a maximum of $172,500,000 at 15% below and 15% above the midpoint of the range respectively. Assuming an adjusted maximum value of 15% above the maximum value, the adjusted maximum value or super maximum value is $198,375,000. The stock will be issued at $10.00 per share.

FinPro Capital Advisors

FinPro Capital Advisors, Inc. (“FCA” or “FinPro”) is a registered broker dealer and is a wholly owned subsidiary of FinPro, Inc. FCA addresses numerous areas of capital markets in the heavily regulated financial institution industry including M&A advisory, capital raising, strategic advice, valuation, due diligence, accounting, mark-to-market, enterprise risk management, business planning and regulatory advice. FCA further specializes in financial valuations and analyses of business enterprises and securities, including the pro forma valuation for savings institutions converting from mutual-to-stock form. We believe that, except for the fee we will receive for the Appraisal to assist in the stock conversion process, we are independent of the Bank, Fidelity Bank and the other parties engaged by Fidelity Bank.

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1. Overview and Financial Analysis

GENERAL OVERVIEW

As of December 31, 2023, the Bank had $1.1 billion in total assets, $769 million in deposits, $659 million in loans held for investment, $23 million in loans held for sale at fair value, and $157 million in equity. The following table shows the Bank’s facilities.

Figure– List of Branch Offices

US Branch List for Fidelity Bank
Street Address	City	State		2023 Deposits ($000)		2022 Deposits ($000)		2018 Deposits ($000)		2022-2023 Growth Rate (%)			2018-2023 Growth Rate (%)
1001 Julia St	New Orleans		LA		7,099		9,610		NA		(26.13	)		NA
1201 S Carrollton Ave	New Orleans		LA		41,978		50,083		29,588		(16.18	)		41.88
1220 Veterans Blvd	Metairie		LA		0		0		0		NA			NA
149 Allen Toussaint Blvd	New Orleans		LA		32,661		48,656		34,509		(32.87	)		(5.36	)
1811 Metairie Ave	Metairie		LA		38,543		43,656		35,297		(11.71	)		9.20
1888 Belle Chasse Hwy	Gretna		LA		27,102		31,821		23,575		(14.83	)		14.96
1901 Gause Blvd E	Slidell		LA		38,048		46,593		34,473		(18.34	)		10.37
2201 N Highway 190	Covington		LA		43,425		43,375		31,384		.12			38.37
2550 Florida St	Mandeville		LA		38,396		40,774		21,173		(5.83	)		81.34
2729 Prytania St	New Orleans		LA		8,413		2,129		NA		295.16			NA
3511 General Degaulle Dr	New Orleans		LA		20,531		22,920		16,797		(10.42	)		22.23
353 Carondelet St	New Orleans		LA		152,722		108,922		89,235		40.21			71.15
3720 Williams Blvd	Kenner		LA		46,088		56,687		44,238		(18.70	)		4.18
3829 Veterans Blvd	Metairie		LA		167,427		206,098		143,307		(18.76	)		16.83
500 C M Fagan Dr	Hammond		LA		29,482		31,347		9,040		(5.95	)		226.13
5530 Crowder Blvd	New Orleans		LA		29,803		33,649		25,934		(11.43	)		14.92
5643 Corporate Blvd	Baton Rouge		LA		18,605		19,753		10,357		(5.81	)		79.64
6920 Bluebonnet Blvd	Baton Rouge		LA		NA		NA		NA		NA			NA
9099 Jefferson Hwy	River Ridge		LA		70,183		75,086		48,799		(6.53	)		43.82

Source: S&P Global

HISTORYANDOVERVIEW

Fidelity Bank is a bank. Fidelity Bank was formed on December 28, 1908, and is historically a mutual institution chartered by the Office of Financial Institutions (OFI). The Bank’s original name was Fidelity Homestead Association, the term “Homestead” was only used in Louisiana when referring to a savings and loan. From its inception, the savings and loan business were concerned with thrift and home ownership by individual savers and borrowers. In July 2007, the name Fidelity Homestead Association, was officially changed to Fidelity Homestead Savings Bank, which allowed the bank to offer even more quality products and services. In January 2014 the Bank purchased NOLA Lending Group, LLC. NOLA was a leader in providing secondary market home financing solutions to the communities they serve. With offices in Louisiana, and Florida, the acquisition expanded the Bank’s presence across the Gulf Coast region. In December 2014, the name Fidelity Homestead Savings Bank, was officially changed to Fidelity Bank, which aligned the bank name with the products and services offered to the communities, and customers, served.

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Fidelity Bank considers the Metropolitan Statistical Areas (“MSAs”), of New Orleans-Metairie-Hammond and Baton Rouge to be our primary market areas for originating loans and gathering deposits. Fidelity Bank’s branch offices are located in the Parish of East Baton Rouge, located within the Baton Rouge MSA, and the Parishes of Jefferson, Orleans, St. Tammany, and Tangipahoa, which are encompassed within the New Orleans-Metairie-Hammond MSA.

The Bank’s business consists primarily of taking deposits from the general public and investing those deposits, together with funds generated from operations, in one- to four-family residential mortgage loans secured by properties located in the Bank’s primary market area. The Bank also originate residential construction loans, commercial real estate loans, commercial loans, home equity loans and lines of credit, and consumer loans.

The Bank operates 18 full-service branches and two drive-up branches in Southern Louisiana. The Bank’s primary lending products are real-estate residential, real-estate commercial, and consumer loans. The Bank’s primary deposit products are certificates of deposit and demand deposit accounts. In January 2014, the Bank acquired the net assets of NOLA Lending Group (“NOLA”) as a fully-owned division of the Bank. NOLA originates, primarily for resale, residential mortgages in Southern Louisiana, the Florida panhandle, and Mississippi.

STRATEGIC DIRECTION

The Bank’s mission is to operate and further expand a profitable and diversified banking franchise. It plans to achieve this by executing its strategy of:

• continued growth and profitability,

• retain and attract qualified personnel, and

• offer customers competitive banking products along with services.

BALANCESHEETTRENDS

The Bank’s balance sheet increased by approximately $118 million, or -11.7%, from $1.01 billion on December 31, 2022, to $1.12 billion on December 31, 2023.

The Bank’s total deposits decreased by $22.2 million, or 2.8%, from $791.5 million on December 31, 2022, to $769.3 million on December 31, 2023.

The Bank’s total equity increased by $4.7 million, or 3.3%, from $152.0 million on December 31, 2022, to $156.7 million on December 31, 2023. The Bank’s capital ratios declined from December 31, 2022, to December 31, 2023 and remained well above regulatory well-capitalized standards.

From December 31, 2022, to $1.12 billion on December 31, 2023, Loan Held for Sale, at Fair Value grew, continuing to highlight the Bank’s mortgage operations.

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Figure– Balance Sheet Trends

FIDELITY BANK

BALANCE SHEETS

DECEMBER 31, 2023 AND 2022

ASSETS

	2023			2022
	(dollars in thousands)
Cash and due from banks	$	5,795		$	8,137
Interest-bearing deposits at other financial institutions		81,313			52,600
Total cash and cash equivalents		87,108			60,737
Securities available for sale		249,898			270,118
Derivative assets		184			384
Loans held for sale, at fair value		22,576			17,110
Loans held for investment, net		659,481			548,831
Federal Home Loan Bank stock, at cost		4,106			2,555
Bank owned life insurance		14,640			14,337
Accrued interest receivable		5,506			4,658
Premises and equipment, net		51,455			46,832
Other real estate owned		815			139
Goodwill		5,786			5,786
Mortgage servicing rights		2,231			8,900
Other assets		21,146			26.880
Total assets	$	1,124,932		$	1,007,267
LIABILITIES AND EQUITY
Deposits:
Non-interest bearing	$	142,032		$	174,553
Interest bearing		627,256			616,975
Total deposits		769,288			791,528
Advances by borrowers for taxes and insurance		11,774			14,157
Other borrowings		172,200			30,100
Accrued interest payable		524			20
Other liabilities		14,409			19,443
Total liabilities		968,195			855,248
Equity:
Retained earnings		172,126			171,008
Accumulated other comprehensive income (loss)		(15,389	)		(18,989	)
Total equity		156,737			152,019
Total liabilities and equity	$	1,124,932		$	1,007,267

Source: Fidelity Bank Financial Statements

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Figure– Key Ratios

	At or For the Year Ended December 31,
	2023			2022
Performance Ratios:
Return on average assets (1)		0.11	%		0.20	%
Return on average equity (2)		0.73	%		1.31	%
Interest rate spread (3)		4.37	%		4.23	%
Net interest margin (4)		4.72	%		4.32	%
Non-interest expense to average assets		2.39	%		2.11	%
Efficiency ratio (5)		96.96	%		97.33	%
Average interest-earning assets to average interest-bearing liabilities		132.20	%		138.52	%
Capital Ratios:
Total risk-based capital		23.52	%		25.68	%
Tier 1 risk-based capital		22.67	%		24.60	%
Common equity Tier 1 risk-based capital		22.67	%		24.60	%
Tier 1 leverage capital		14.80	%		15.83	%
Average equity to average assets		14.64	%		15.11	%
Asset Quality Ratios:
Allowance for credit losses to total loans (6)		0.90	%		1.27	%
Allowance for credit losses to non-performing loans		80.93	%		147.46	%
Net (charge-offs) recoveries to average outstanding loans		(0.27	)%		(0.09	)%
Non-performing loans to total loans		1.11	%		0.86	%
Non-performing loans to total assets		0.68	%		0.49	%
Total non-performing assets to total assets		0.75	%		0.51	%
Other:
Number of offices		18			17
Number of full-time equivalent employees		366			387

(1) Represents net income divided by average total assets.

(2) Represents net income divided by average equity.

(3) Represents the difference between the weighted average yield on average interest-earning assets and the weighted average cost of average interest-bearing liabilities.

(4) Represents net interest income divided by average interest-earning assets.

(5) Represents non-interest expense divided by the sum of net interest and dividend income and non-interest income.

(6) Total loans includes loans held for investment and loans held for sale.

Source: Prospectus

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Figure– Other Financial Metrics

	At December 31,
	2023		2022
	(In thousands)
Selected Financial Condition Data:
Total assets	$	1,124,932	$	1,007,267
Total cash and cash equivalents		87,108		60,737
Securities available for sale		249,898		270,118
Loans held for sale, at fair value		22,576		17,110
Loans held for investment, net		659,481		548,831
Total deposits		769,288		791,528
Federal Home Loan Bank advances		52,200		30,100
Federal Reserve Term Funding		120,000		—
Total equity		156,800		152,019

	For the Years Ended December 31,
	2023		2022
	(In thousands)
Selected Operating Data:
Total interest and dividend income	$	54,298	$	43,810
Total interest expense		10,130		2,244
Net interest income		44,168		41,566
Provision/(benefit) for credit losses		649		(396	)
Net interest income after provision for credit losses		43,519		41,962
Total non-interest income		24,925		22,541
Total non-interest expense		66,996		62,398
Net income before income taxes		1,448		2,105
Income tax expense/(benefit)		330		(5	)
Net income	$	1,118	$	2,110

Source: Prospectus

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LOAN PORTFOLIO

The Bank offers mortgage, commercial and consumer loans to customers. A substantial portion of the loan portfolio is represented by loans in Southeast Louisiana.

As of December 31, 2023, the Bank had both loans held for investment and loans held for sale at fair value given the Bank’s mortgage operations. Of loans held for investment, $246.7 million of loans secured by one- to four-family residential real estate, representing 40.1% of total loans receivable. As of December 31, 2023, the Bank had $275.9 million in commercial loans, representing 41.8% of total loans. As of December 31, 2023, the Bank had $126.1 million in consumer loans, representing 19.1% of total loans receivable. Total loans receivable increased by $110.7 million, or 20.2%, to $659.5 million as of December 31, 2023, from $548.8 million on December 31, 2022.

Additionally, in 2023, the Bank grew fixed rate residential mortgages by $23.6 million or 34.0% compared to the prior year. The Bank also grew commercial real estate loans by $37.1 million or 21.9% from the prior year.

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Figure – Loan Composition

The components of loans were as follows at December 31:

	2023			2022
	(dollars in thousands)
Residential mortgage loans (1-4 family):
Fixed	$	94,267		$	70,659
Variable		154,630			143,312
Construction		15,764			686
Total residential mortgage loans		264,661			214,657
Commercial loans
Real estate		206,267			169,144
SBA Paycheck Protection Program		566			833
Other		69,053			65,305
Total commercial loans		275,886			235,282
Consumer loans:
Home equity		98,331			85,485
Other consumer		27,740			21,416
Total consumer loans		126,071			106,901
		666,618			556,840
Less:
Undisbursed portion of mortgage loans		(118	)		(54	)
Net deferred loan costs (fees)		(816	)		(657	)
Allowance for credit losses		(6,203	)		(7,298	)
Total loans receivable	$	659,481		$	548,831

Source: Offering Prospectus

INVESTMENTS

The Bank’s investment portfolio is held 100% as available for sale securities. The Bank’s investment portfolio generally consists of US government sponsored agencies, mortgage-backed securities and corporate bonds.

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Conversion Valuation Appraisal Report

Investment securities decreased $20.2 million, or 7.4%, to $249.9 million at December 31, 2023, from $20.1 million at December 31, 2022. Over 2023 the Bank experienced a net reduction in the gross unrealized losses of the investment portfolio, which was $24.2 million on December 31, 2022, reducing to $19.7 million at December 31, 2023. The unrealized losses noted are interest rate related. The Bank has not identified any issues related to the ultimate repayment of principal as a result of credit concerns on these securities. The Bank does not consider these securities to be other-than-temporarily impaired at December 31, 2023. At year-end 2023 and 2022, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of Bank equity. As of December 31, 2023 the Bank pledged approximately $170 million of securities, up from $26 million at the end of 2022.

securities sales were $17.3 million during the year ended December 31, 2023, and $14.0 million during the year ended December 31, 2023. These were offset by calls, maturities, as well as repayments of $43.8 million.

Figure– Investment Composition

	2023
	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
Available for sale:
U.S. government sponsored agencies	$	146,112	$	175	$	10,760	$	135,527
Mortgage-backed securities: residential		85,902		52		7,159		78,795
Corporate bonds		37,298		—		1,787		35,511
Small Business Administration		66		—		1		65
Total available for sale	$	269,378	$	227	$	19,707	$	249,898

	2022
Available for sale:
U.S. government sponsored agencies	$	168,619	$	64	$	14,173	$	154,510
Mortgage-backed securities: residential		82,464		26		7,633		74,857
Corporate bonds		42,963		70		2,390		40,643
Small Business Administration		109		—		1		108
Total available for sale	$	294,155	$	160	$	24,197	$	270,118

Source: Offering Prospectus

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ASSETQUALITY

Over the past year the Bank has seen a decline in loan loss reserves to gross loans, declining to 0.90% as of December 31, 2023, from 1.27% as of December 31, 2022. The Bank has strong coverage to both non-performing loans and non-accrual loans as measured by the allowance for loan losses. The Bank has had charge-offs rise over the course of 2023, to 0.27%. Please see the Key Ratio Trends table for further details.

As of December 31, 2023 the Bank has seen the level of special mention and substandard loans rise, while doubtful and loss loans have declined. Non-accrual loans have also risen over 2023, to be $7.7 million.

Figure– Non-Performing Asset Composition

	December 31, 2023
	Pass		Special Mention		Substandard		Doubtful		Loss		Total
1-4 Family Residential	$	242,271	$	356	$	6,270	$	—	$	—		248,897
Construction		13,764		—		—		—		—		15,764
Commercial Real Estate		195,050		9,394		1,823		—		—		206,267
SBA Paycheck Protection Program		566		—		—		—		—		566
Other Commercial		64,829		1,775		2,008		18		423		69,053
Home Equity		96,802		66		1,426		33		4		98,331
Other Consumer Loans		27,693		27		20		—		—		27,740
Total Loans	$	642,975	$	11,618	$	11,547	$	51	$	427	$	666,618

	December 31, 2022
	Pass		Special Mention		Substandard		Doubtful		Loss		Total
1-4 Family Residential	$	209,717	$	116	$	4,138	$	—	$	—		213,971
Construction		686		—		—		—		—		686
Commercial Real Estate		167,191		108		1,845		—		—		169,144
SBA Paycheck Protection Program		784		—		38		11		—		833
Other Commercial		63,767		311		714		306		207		65,305
Home Equity		84,348		101		1,001		35		—		85,485
Other Consumer Loans		21,190		83		63		65		15		21,416
Total Loans	$	547,683	$	719	$	7,799	$	417	$	222	$	556,840

Source: Fidelity Bank Financial Statements

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FUNDINGCOMPOSITION

Deposits decreased by $22.2 million, or 2.8%, to $769.3 million at December 31, 2023 from $791.5 million at December 31, 2022. Non-maturity deposits (Negotiable Order of Withdrawal (NOW), Savings and Money Market accounts) decreased by $119.4 million or 19.1% from December 31, 2022, to December 31, 2023. Maturity deposits (CDs, Wholesale and Brokered Deposits) grew by $97.2 million or 57.8% from December 31, 2022, to December 31, 2023. Wholesale and brokered deposits have grown by $58.1 million from December 31, 2022, to December 31, 2023.

The weighted average interest rate on depositor accounts as of December 31, 2023 and 2022 was 1.23% and 0.21%, respectively. Included in deposits are certificates of deposit in amounts greater than $250,000 totaling $23 million of account balance and approximately $891 thousand in annual interest expenses for December 31, 2023 and $10 million of account balance and approximately $71 thousand in annual interest expense for December 31, 2022.

The Bank’s CDs are generally short to intermediate terms with 73.7% scheduled to mature in 2024.

Figure– Deposit Composition and Time Deposit Maturity Schedule

	2023		2022		$ Variance			Variance
NOW		268,379		321,107	($	52,728	)		-16.5	%
Savings		127,213		167,402	($	40,189	)		-23.9	%
Money Market		108,778		135,255	($	26,477	)		-19.2	%
Non-maturity		504,370		623,764	($	119,394	)		-19.1	%
CDs		174,362		135,309	$	39,053			28.8	%
Wholesale and Brokered Deposits		90,556		32,455	$	58,101			178.7	%
Total Time Deposits		264,918		167,764	$	97,154			57.8	%
Total Deposits		769,288		791,528	($	22,240	)		-2.8	%

Source: Fidelity Bank Financial Statements

At December 31, 2023, the Bank had $52.2 million of outstanding borrowings from the Federal Home Loan Bank, rising $22.1 million or 73.1% from December 31, 2022. At December 31, 2022, the Bank had the capacity to borrow $314 million from the Federal Home Loan Bank as part of a blanked lien on first mortgage loans and cash and investments held with the FHLB.

As of December 31, 2023, the Bank had $120 million borrowed from the Federal Reserve’s Bank Term Funding Program. The borrowing carries a fixed rate of 4.84%, matures December 24, 2024, and is prepayable at any time. Collateral for borrowings is the par value of investment securities.

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Conversion Valuation Appraisal Report

ASSETLIABILITYMANAGEMENT

The following chart provides the Bank’s estimated net portfolio value at various interest rate shock scenarios as measured by Economic Value of Equity (EVE) and Net Interest Income (NII). The Bank’s starting flat rate EVE ratio of 20.15% is strong. The Bank is liability sensitive as the Bank’s EVE ratio declines in rising rate scenarios and increases as rates decline. The Bank’s NII results display decline in NII as rates rise and minimal impact to declining rates.

Figure– EVE Results as of December 31, 2022

At December 31, 2023
Change in Interest Rates (basis points) (1)	Estimated EVE (2)		Estimated Increase (Decrease) in EVE						EVE as a Percentage of Present Value of Assets (3)
			Amount			Percent			EVE Ratio (4)			Increase (Decrease) (basis points)
(Dollars in thousands)
400	$	147,067	$	(79,678	)		(35.1	)%		12.85	%		(730	)
300		169,590		(57,155	)		(25.2	)%		14.81	%		(534	)
200		190,219		(36,526	)		(16.1	)%		16.62	%		(353	)
100		209,871		(16,874	)		(7.4	)%		18.33	%		(182	)
—		226,745		—			—	%		20.15	%		—
(100)		241,035		14,290			6.3	%		21.06	%		91
(200)		248,684		21,939			9.7	%		21.72	%		157

(1) Assumes an immediate uniform change in interest rates at all maturities.

(2) EVE is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts.

(3) Present value of assets represents the discounted present value of incoming cash flows on interest-earning assets.

(4) EVE Ratio represents EVE divided by the present value of assets.

Source: Offering Prospectus

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Conversion Valuation Appraisal Report

Figure– NII Results as of December 31, 2022

At December 31, 2023
Change in Interest Rates (basis points) (1)	NII Year 1 Forecast		Year 1 Change from Level
(Dollars in thousands)
+400	$	36,405		(16.60	)%
+300		39,343		(9.87	)%
+200		41,669		(4.54	)%
+100		43,114		(1.23	)%
Level		43,651		—	%
(100)		43,498		(0.35	)%
(200)		42,804		(1.94	)%

(1) Assumes an immediate uniform change in interest rates at all maturities.

Source: Offering Prospectus

CAPITAL

Total equity increased $4.7 million, or 3.3%, to $156.7 million at December 31, 2023 from $152.0 million at December 31, 2022. The increase resulted from net income of $1.1 million and decline in Accumulated Other Comprehensive Income during the twelve months ended December 31, 2023.

INCOMEANDEXPENSETRENDS

The Bank’s net income has trended downwards between the twelve months ended December 31, 2023, and December 31, 2022. The decrease is predominately attributable to higher levels of non-interest expenses offset slightly by growth of net interest income and non-interest income. Growth of non-interest expenses was experienced primarily in rises in data processing, net and other general and administrative expenses. During this time frame net interest income rose from $41.6 million for the twelve months ended December 31, 2022, to $44.2 million for the twelve months ended December 31, 2023.

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Conversion Valuation Appraisal Report

Figure– Income Statement Trends

FIDELITY BANK

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

	2023			2022
	(dollars in thousands)
Interest income
Interest and fees on loans	$	43,287		$	35,481
Interest and dividends on investment securities		9,278			5,927
Interest on deposits in other banks		1,733			2,402
Total interest and dividend income		54,298			43,810
Interest expense
Deposits		6,762			1,797
Borrowed funds		3,368			447
Total interest expense		10,130			2,244
Net interest income		44,168			41,566
Provision for credit losses		649			(396	)
Net interest income after provision for credit losses		43,519			41,962
Non-interest income
Service charges and fee income from deposit accounts		3,160			3,547
Gain on sale of mortgage loans		12,526			14,477
Gain (loss) on sales and disposal of assets		(1	)		9
Gain on sale of available for sale securities		66			135
Gain on sale of mortgage servicing rights		5,318			—
Other non-interest income		3,856			4,373
Total non-interest income		24,925			22,541
Non-interest expenses
Salaries and employee benefits		40,729			41,953
Occupancy and equipment		8,067			8,238
Directors’ fees		806			748
Data processing		4,683			3,665
Advertising and marketing		1,755			1,785
Mortgage servicing rights amortization		1,763			3,079
Hedging activity, net		247			(4,904	)
Other general and administrative		8,946			7,834
Total non-interest expenses		66,996			62,398
Net income before income taxes		1,448			2,105
Income tax expense (benefit)		330			(5	)
Net income	$	1,118		$	2,110

Source: Fidelity Bank Financials

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Conversion Valuation Appraisal Report

Figure– Rate Volume Analysis

	For the Year Ended December 31,
	2023								2022
	Average Outstanding Balance			Interest		Average Yield/Rate			Average Outstanding Balance			Interest		Average Yield/Rate
	(Dollars in thousands)
Interest-earning assets:
Cash and cash equivalents	$	38,685		$	1,733		4.48	%	$	200,476		$	2,402		1.20	%
Securities		259,311			9,278		3.58	%		197,537			5,927		3.00	%
Loans		611,317			41,679		6.82	%		526,578			33,825		6.42	%
Loans available for sale		26,098			1,608		6.16	%		38,382			1,656		4.31	%
Total earning assets		935,411			54,298		5.80	%		962,973			43,810		4.55	%
Non-interest-earning assets:
Cash and cash equivalents		6,714								6,982
Fixed assets		49,960								46,914
Allowance for loan losses		(6,332	)							(7,926	)
Other		56,562								58,102
Total non-interest-earning assets		106,905								104,073
Total assets	$	1,042,316							$	1,067,045
Interest-bearing liabilities:
Interest-bearing demand deposits	$	131,764			136		0.10	%	$	149,695			102		0.07	%
Interest-bearing savings and money markets		262,711			1,091		0.42	%		326,618			469		0.14	%
Certificates of deposit		232,260			5,535		2.38	%		185,193			1,226		0.66	%
Total interest-bearing deposits		626,735			6,762		1.08	%		661,507			1,797		0.27	%
Interest-bearing borrowings		80,831			3,368		4.17	%		33,659			447		1.33	%
Total interest-bearing liabilities		707,567			10,130		1.43	%		695,166			2,244		0.32	%
Non-interest:
Demand deposits		173,927								205,346
Other liabilities		8,197								5,348
Total non-interest liabilities		182,124								210,694
Total equity		152,626								161,186
Total liabilities and equity	$	1,042,316							$	1,067,045
Net interest income				$	44,168							$	41,566

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Conversion Valuation Appraisal Report

Net interest-earning assets (1)	$	308,676				$	301,466
Net interest rate spread (2)				4.37	%				4.23	%
Net yield on interest-earning assets				4.72	%				4.32	%
Average interest-earning assets to interest-bearing liabilities		1.32x					1.39x
Average equity to assets		14.64	%				15.11	%

(1) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.

Source: Offering Prospectus

LEGALPROCEEDINGS

As of December 31, 2023, the Bank was not party to any material pending legal proceedings that management believes would have a material adverse effect on the Bank’s financial condition, results of operations or cash flows.

SUBSIDIARIES

The Bank does not have any subsidiaries.

Upon completion of the conversion and stock offering, Fidelity Bank will become the sole and wholly-owned subsidiary of FB Bancorp. Fidelity Bank has no subsidiaries.

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Conversion Valuation Appraisal Report

2. Market Area Analysis

The following tables provide deposit and demographic data for the counties in which the Bank has branches.

Figure– Deposit Market Share

Market Share Data*
						2023						2022
Institution (ST)	Type	2023 Rank		2022 Rank		Number of Branches		Total Deposits In Market ($000)		Total Market Share (%)		Total Deposits In Market ($000)		Total Market Share (%)
Jefferson, LA (Parish)
Hancock Whitney Corp. (MS)	Bank		1		1		13		3,169,531		21.53		3,477,264		22.05
JPMorgan Chase & Co. (NY)	Bank		2		2		11		2,538,199		17.24		2,708,340		17.17
Capital One Financial Corp. (VA)	Bank		3		3		9		2,080,699		14.13		2,707,962		17.17
Regions Financial Corp. (AL)	Bank		4		4		10		1,806,921		12.27		1,440,123		9.13
CB&T Holding Corp. (LA)	Bank HC		5		6		1		1,063,185		7.22		884,816		5.61
Gulf Coast B&TC (LA)	Comm’l Bank		6		5		7		979,253		6.65		1,019,660		6.47
First Horizon Corp. (TN)	Bank		7		7		8		666,465		4.53		832,674		5.28
MBT Bancshares Inc. (LA)	Bank		8		8		7		456,190		3.10		523,393		3.32
Fidelity Bank (LA)	Savings Bank		9		9		6		349,343		2.37		413,348		2.62
Home Bancorp Inc. (LA)	Bank		10		10		4		296,634		2.01		386,453		2.45
Total For Institutions In Market							103		14,724,596				15,771,338
Orleans, LA (Parish)
Capital One Financial Corp. (VA)	Bank		1		1		7		9,628,551		46.19		9,453,258		42.96
JPMorgan Chase & Co. (NY)	Bank		2		3		11		3,904,594		18.73		3,955,127		17.97
Hancock Whitney Corp. (MS)	Bank		3		2		11		3,500,311		16.79		4,161,691		18.91
First Horizon Corp. (TN)	Bank		4		4		8		1,188,758		5.70		1,449,105		6.59
Gulf Coast B&TC (LA)	Comm’l Bank		5		5		5		608,245		2.92		710,041		3.23
Liberty Finl Services Inc. (LA)	Bank HC		6		7		6		590,662		2.83		536,340		2.44
Regions Financial Corp. (AL)	Bank		7		6		6		511,207		2.45		590,318		2.68
Fidelity Bank (LA)	Savings Bank		8		9		7		293,207		1.41		275,969		1.25
BancPlus Corp. (MS)	Bank		9		8		3		165,755		0.80		449,451		2.04
Fifth District SB (LA)	Thrift		10		10		2		143,840		0.69		138,232		0.63
Total For Institutions In Market							78		20,843,600				22,004,118
Saint Tammany, LA (Parish)
Hancock Whitney Corp. (MS)	Bank		1		1		9		1,671,180		22.06		1,521,339		18.86
JPMorgan Chase & Co. (NY)	Bank		2		2		6		1,366,621		18.04		1,497,824		18.57
Capital One Financial Corp. (VA)	Bank		3		3		4		963,269		12.71		1,223,713		15.17
Regions Financial Corp. (AL)	Bank		4		4		4		696,885		9.20		1,012,598		12.55
Resource Bankshares Inc. (LA)	Bank HC		5		5		6		630,533		8.32		680,406		8.44
Gulf Coast B&TC (LA)	Comm’l Bank		6		6		4		470,401		6.21		464,635		5.76
BancPlus Corp. (MS)	Bank		7		9		2		295,259		3.90		183,795		2.28
Home Bancorp Inc. (LA)	Bank		8		7		6		229,683		3.03		253,170		3.14
First Horizon Corp. (TN)	Bank		9		8		3		208,372		2.75		235,052		2.91
Bus. First Bancshares Inc. (LA)	Bank		10		11		1		169,535		2.24		136,204		1.69
Fidelity Bank (LA)	Savings Bank		14		13		3		119,869		1.58		130,742		1.62
Total For Institutions In Market							76		7,576,199				8,065,993
Tangipahoa, LA (Parish)
First Guaranty Bancshares Inc. (LA)	Bank		1		1		7		1,144,754		41.23		1,057,640		36.99
Hancock Whitney Corp. (MS)	Bank		2		2		5		499,199		17.98		514,005		17.97
The First Bancshares (MS)	Bank		3		3		4		242,431		8.73		313,786		10.97
Regions Financial Corp. (AL)	Bank		4		4		4		230,561		8.30		251,949		8.81
BancPlus Corp. (MS)	Bank		5		6		2		183,051		6.59		186,093		6.51
Capital One Financial Corp. (VA)	Bank		6		5		2		159,893		5.76		187,537		6.56
JPMorgan Chase & Co. (NY)	Bank		7		7		1		136,310		4.91		153,289		5.36
Investar Holding Corp. (LA)	Bank		8		8		1		52,420		1.89		52,225		1.83
Gulf Coast B&TC (LA)	Comm’l Bank		9		9		1		38,930		1.40		44,571		1.56
Fidelity Bank (LA)	Savings Bank		10		11		1		29,482		1.06		31,347		1.10
Total For Institutions In Market							32		2,776,480				2,859,592
East Baton Rouge, LA (Parish)
JPMorgan Chase & Co. (NY)	Bank		1		1		18		8,594,189		42.50		9,421,851		43.28
Capital One Financial Corp. (VA)	Bank		2		2		7		3,147,592		15.57		3,677,854		16.89
Hancock Whitney Corp. (MS)	Bank		3		3		15		2,186,250		10.81		2,506,855		11.52
First Horizon Corp. (TN)	Bank		4		5		6		1,348,731		6.67		1,355,207		6.23
Regions Financial Corp. (AL)	Bank		5		4		14		1,196,213		5.92		1,435,918		6.60
Bus. First Bancshares Inc. (LA)	Bank		6		6		4		1,120,588		5.54		762,939		3.50
Investar Holding Corp. (LA)	Bank		7		7		4		647,416		3.20		547,797		2.52
Red River Bancshares Inc. (LA)	Bank		8		8		5		461,377		2.28		544,535		2.50
Zachary Bancshares Inc. (LA)	Bank HC		9		9		3		327,390		1.62		348,019		1.60
Cadence Bank (MS)	Bank		10		11		3		178,622		0.88		179,690		0.83
Fidelity Bank (LA)	Savings Bank		25		25		2		18,605		0.09		19,753		0.09
Total For Institutions In Market							116		20,219,775				21,770,267

* The market share data displayed is for Fidelity Bank

Source: S&P Global

	Page 22
Conversion Valuation Appraisal Report

Figure– County Demographics

County	Market Rank		Number of Branches		Deposits In Market ($000)		Deposit Market Share (%)		Percent of State Franchise (%)		Percent of National Franchise (%)		2024 Total Population (Actual)		2020-2024 Population Change (%)			2024-2029 Projected Population Change (%)			2024 Median Household Income ($)		2024-2029 Projected HH Income Change (%)
Louisiana (LA)
Jefferson		9		6		349,343		2.37		43.10		43.10		422,554		(4.14	)		(2.42	)		61,009		5.93
Orleans		8		7		293,207		1.41		36.18		36.18		369,720		(3.72	)		(1.27	)		49,711		10.85
Saint Tammany		14		3		119,869		1.58		14.79		14.79		278,168		5.14			5.05			72,244		4.18
Tangipahoa		10		1		29,482		1.06		3.64		3.64		139,121		4.48			4.49			56,496		7.29
East Baton Rouge		25		2		18,605		0.09		2.30		2.30		450,549		(1.36	)		(0.07	)		57,044		2.54
LA Totals				19		810,506				100.00		100.00		1,660,112
Weighted Average:																(2.24	)		(0.59	)		58,328		7.42
Louisiana
Aggregate: Entire														4,584,043		(1.58	)		(0.32	)		58,060		8.03
State of Louisiana
Aggregate:														336,157,119		1.42			2.40			75,874		10.12
National

Source: S&P Global

3. Comparisons with Publicly Traded Thrifts

INTRODUCTION

This section presents an analysis of the Bank’s operations against a selected group (“Comparable Group”) of publicly traded, fully converted thrifts. The Comparable Group was selected based upon similarity of characteristics to the Bank. The Comparable Group multiples provide the basis for the valuation of the Bank.

Factors that influence the Bank’s value such as balance sheet structure and size, profitability, income and expense trends, capital levels, credit risk, and recent operating results can be measured against the Comparable Group. The Comparable Group’s current market pricing, coupled with the appropriate aggregate adjustment for differences between the Bank and the Comparable Group, will then be utilized as the basis for the pro forma valuation of the Bank’s to-be-issued common stock.

SELECTION CRITERIA

The goal of the selection criteria process is to find those institutions with characteristics that most closely match those of the Bank. In an ideal world, all of the Comparable Group would contain the exact characteristics of the Bank. However, none of the Comparables selected will be exact clones of the Bank.

The Peer Group selection process is governed by the general parameters set forth in the regulatory valuation guidelines. Accordingly, the Peer Group is comprised of only those publicly traded savings institutions whose common stock is either listed on the NYSE or NASDAQ, since their stock trading activity is regularly reported and generally more frequent than non-publicly traded and closely-held institutions. Institutions that are not listed on the NYSE or NASDAQ are inappropriate, since the trading activity for thinly-traded or closely-held stocks are typically highly irregular in terms of frequency and price and thus may not be a reliable indicator of market value. We have also excluded from the Peer Group those companies under acquisition or merger of equals.

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Conversion Valuation Appraisal Report

Ideally, the Peer Group, which must have at least 10 members to comply with the regulatory valuation guidelines, should be comprised of locally- or regionally-based institutions with comparable resources, strategies and financial characteristics. There are approximately 46 publicly-traded savings institutions nationally and, thus, it is typically the case that the Peer Group will be comprised of institutions with relatively comparable characteristics. To the extent that differences exist between the converting institution and the Peer Group, valuation adjustments will be applied to account for the differences. Since the Company will be a full public company upon completion of the offering, we considered only full public companies to be viable candidates for inclusion in the Peer Group. From the universe of publicly-traded thrifts, we selected institutions with characteristics similar to those of the Bank. In the selection process, we applied the following “screen” to the universe of all public companies that were eligible for consideration:

Next in the screening process, FinPro selected all fully converted thrifts located in the South West, South East, Mid-West Regions. This resulted in 31 organizations.

FinPro excluded institutions that have recently converted, as the earnings of newly converted institutions do not reflect a full year’s benefit from the reinvestment of proceeds, and thus the price/earnings multiples and return on equity measures for these institutions tend to be skewed upward and downward, respectively. As such, two institutions were excluded that converted after January 1, 2022, were eliminated.

Of the remaining 29, FinPro then eliminated 16 of the institutions with assets in less than $500 million or assets excess of $3.0 billion as these entities do not have comparable financial and managerial resources and branch networks.

FinPro eliminated one minority focused institution.

This results in a total of 12 for the Comparable Group. FinPro reviewed the recent performance and news releases of these companies and determined that all were acceptable for the Comparable Group.

Figure– Comparable Group

Corporate

Company Name	Ticker		Exchange		IPO Date		Number of Offices	City		State
1895 Bancorp of Wisconsin, Inc. (NASDAQCM:BCOW)		BCOW		NASDAQCM		1/8/2019	6		Greenfield		WI
Affinity Bancshares, Inc. (NASDAQCM:AFBI)		AFBI		NASDAQCM		4/27/2017	3		Covington		GA
Blue Foundry Bancorp (NASDAQGS:BLFY)		BLFY		NASDAQGS		7/15/2021	21		Rutherford		NJ
ESSA Bancorp, Inc. (NASDAQGS:ESSA)		ESSA		NASDAQGS		4/3/2007	22		Stroudsburg		PA
Finward Bancorp (NASDAQCM:FNWD)		FNWD		NASDAQCM		1/0/1900	26		Munster		IN
HMN Financial, Inc. (NASDAQGM:HMNF)		HMNF		NASDAQGM		6/30/1994	14		Rochester		MN
Home Federal Bancorp, Inc. of Louisiana (NASDAQCM:HFBL)		HFBL		NASDAQCM		1/18/2005	11		Shreveport		LA
IF Bancorp, Inc. (NASDAQCM:IROQ)		IROQ		NASDAQCM		7/7/2011	8		Watseka		IL
Northeast Community Bancorp, Inc. (NASDAQCM:NECB)		NECB		NASDAQCM		7/5/2006	12		White Plains		NY
Ponce Financial Group, Inc. (NASDAQGM:PDLB)		PDLB		NASDAQGM		9/29/2017	14		Bronx		NY
Sterling Bancorp, Inc. (Southfield, MI) (NASDAQCM:SBT)		SBT		NASDAQCM		11/16/2017	27		Southfield		MI
William Penn Bancorporation (NASDAQCM:WMPN)		WMPN		NASDAQCM		4/15/2008	13		Bristol		PA
25% Percentile:							10
Median:							14
75% Percentile:							21

Source: S&P Global

	Page 24
Conversion Valuation Appraisal Report

List below provides a list of the institutions that were eliminated and included by the Comparable screens.

Figure– List of all Publicly-traded Savings Institutions

Entity Name	INDUSTRY CLASSIFICATION	Exchange	Merger Target	US Region	IPO Date		Total Assets (Reported) FQ32023		Reason Eliminated
NSTS Bancorp, Inc. (NASDAQCM:NSTS)	Savings Institutions	NASDAQCM	No	MW		01/18/2022		251,786		Recent Conversion
Catalyst Bancorp, Inc. (NASDAQCM:CLST)	Savings Institutions	NASDAQCM	No	SW		10/12/2021		270,891		Outside Asset Range
Generations Bancorp NY, Inc. (NASDAQCM:GBNY)	Savings Institutions	NASDAQCM	No	MA		07/10/2006		408,730		Outside Asset Range
PB Bankshares, Inc. (NASDAQCM:PBBK)	Savings Institutions	NASDAQCM	No	MA		07/14/2021		409,212		Outside Asset Range
Cullman Bancorp, Inc. (NASDAQCM:CULL)	Savings Institutions	NASDAQCM	No	SE		10/08/2009		417,315		Outside Asset Range
TC Bancshares, Inc. (NASDAQCM:TCBC)	Savings Institutions	NASDAQCM	No	SE		07/20/2021		439,876		Outside Asset Range
Central Plains Bancshares, Inc. (NASDAQCM:CPBI)	Savings Institutions	NASDAQCM	No	MW		10/19/2023		453,919		Outside Asset Range
1895 Bancorp of Wisconsin, Inc. (NASDAQCM:BCOW)	Savings Institutions	NASDAQCM	No	MW		01/08/2019		554,576		In Comparable Group
First Seacoast Bancorp, Inc. (NASDAQCM:FSEA)	Savings Institutions	NASDAQCM	No	NE		07/16/2019		557,155		Out of Region
Home Federal Bancorp, Inc. of Louisiana (NASDAQCM:HFBL)	Savings Institutions	NASDAQCM	No	SW		01/18/2005		654,188		In Comparable Group
Carver Bancorp, Inc. (NASDAQCM:CARV)	Savings Institutions	NASDAQCM	No	MA		10/24/1994		742,780		Minority Focused Institution
William Penn Bancorporation (NASDAQCM:WMPN)	Savings Institutions	NASDAQCM	No	MA		04/15/2008		826,031		In Comparable Group
Affinity Bancshares, Inc. (NASDAQCM:AFBI)	Savings Institutions	NASDAQCM	No	SE		04/27/2017		843,258		In Comparable Group
BV Financial, Inc. (NASDAQCM:BVFL)	Savings Institutions	NASDAQCM	No	MA		01/12/2005		885,254		Recent Conversion
IF Bancorp, Inc. (NASDAQCM:IROQ)	Savings Institutions	NASDAQCM	No	MW		07/07/2011		910,783		In Comparable Group
HMN Financial, Inc. (NASDAQGM:HMNF)	Savings Institutions	NASDAQGM	No	MW		06/30/1994		1,107,135		In Comparable Group
ECB Bancorp, Inc. (NASDAQCM:ECBK)	Savings Institutions	NASDAQCM	No	NE		07/27/2022		1,213,762		Out of Region
Broadway Financial Corporation (NASDAQCM:BYFC)	Savings Institutions	NASDAQCM	No	WE		01/08/1996		1,231,372		Out of Region
Provident Financial Holdings, Inc. (NASDAQGS:PROV)	Savings Institutions	NASDAQGS	No	WE		06/27/1996		1,301,093		Out of Region
Riverview Bancorp, Inc. (NASDAQGS:RVSB)	Savings Institutions	NASDAQGS	No	WE		10/26/1993		1,590,623		Out of Region
Provident Bancorp, Inc. (NASDAQCM:PVBC)	Savings Institutions	NASDAQCM	No	NE		07/15/2015		1,670,309		Out of Region
Northeast Community Bancorp, Inc. (NASDAQCM:NECB)	Savings Institutions	NASDAQCM	No	MA		07/05/2006		1,764,135		In Comparable Group
Timberland Bancorp, Inc. (NASDAQGM:TSBK)	Savings Institutions	NASDAQGM	No	WE		01/12/1998		1,895,115		Out of Region
Blue Foundry Bancorp (NASDAQGS:BLFY)	Savings Institutions	NASDAQGS	No	MA		07/15/2021		2,044,963		In Comparable Group
Finward Bancorp (NASDAQCM:FNWD)	Savings Institutions	NASDAQCM	No	MW				2,108,279		In Comparable Group
OP Bancorp (NASDAQGM:OPBK)	Savings Institutions	NASDAQGM	No	WE		03/27/2018		2,147,730		Out of Region
First Northwest Bancorp (NASDAQGM:FNWB)	Savings Institutions	NASDAQGM	No	WE		01/29/2015		2,201,797		Out of Region
ESSA Bancorp, Inc. (NASDAQGS:ESSA)	Savings Institutions	NASDAQGS	No	MA		04/03/2007		2,225,438		In Comparable Group
Territorial Bancorp Inc. (NASDAQGS:TBNK)	Savings Institutions	NASDAQGS	No	WE		07/10/2009		2,236,672		Out of Region
Sterling Bancorp, Inc. (Southfield, MI) (NASDAQCM:SBT)	Savings Institutions	NASDAQCM	No	MW		11/16/2017		2,416,003		In Comparable Group
Western New England Bancorp, Inc. (NASDAQGS:WNEB)	Savings Institutions	NASDAQGS	No	NE		12/27/2001		2,564,571		Out of Region
Ponce Financial Group, Inc. (NASDAQGM:PDLB)	Savings Institutions	NASDAQGM	No	MA		09/29/2017		2,750,722		In Comparable Group
FS Bancorp, Inc. (NASDAQCM:FSBW)	Savings Institutions	NASDAQCM	No	WE		07/09/2012		2,972,669		Out of Region
Third Coast Bancshares, Inc. (NASDAQGS:TCBX)	Savings Institutions	NASDAQGS	No	SW		11/08/2021		4,396,074		Outside Asset Range
Hingham Institution for Savings (NASDAQGM:HIFS)	Savings Institutions	NASDAQGM	No	NE		12/13/1988		4,483,947		Out of Region
Southern Missouri Bancorp, Inc. (NASDAQGM:SMBC)	Savings Institutions	NASDAQGM	No	MW		04/13/1994		4,643,502		Outside Asset Range
Northfield Bancorp, Inc. (Staten Island, NY) (NASDAQGS:NFBK)	Savings Institutions	NASDAQGS	No	MA		11/07/2007		5,598,396		Outside Asset Range
TrustCo Bank Corp NY (NASDAQGS:TRST)	Savings Institutions	NASDAQGS	No	MA				6,168,191		Outside Asset Range
Kearny Financial Corp. (NASDAQGS:KRNY)	Savings Institutions	NASDAQGS	No	MA		02/23/2005		7,897,832		Outside Asset Range
Capitol Federal Financial, Inc. (NASDAQGS:CFFN)	Savings Institutions	NASDAQGS	No	MW		03/31/1999		9,576,064		Outside Asset Range
Provident Financial Services, Inc. (NYSE:PFS)	Savings Institutions	NYSE	No	MA		01/15/2003		14,210,810		Outside Asset Range
Northwest Bancshares, Inc. (NASDAQGS:NWBI)	Savings Institutions	NASDAQGS	No	MW		11/04/1994		14,419,105		Outside Asset Range
WSFS Financial Corporation (NASDAQGS:WSFS)	Savings Institutions	NASDAQGS	No	MA		11/26/1986		20,594,672		Outside Asset Range
Axos Financial, Inc. (NYSE:AX)	Savings Institutions	NYSE	No	WE		03/14/2005		21,623,764		Out of Region
WaFd, Inc (NASDAQGS:WAFD)	Savings Institutions	NASDAQGS	No	WE		11/17/1982		22,640,122		Out of Region
New York Community Bancorp, Inc. (NYSE:NYCB)	Savings Institutions	NYSE	No	MA		11/23/1993		116,322,000		Outside Asset Range

Source: S&P Global

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Conversion Valuation Appraisal Report

OVERVIEWOFTHE COMPARABLES

The members of the Comparable Group were reviewed against the Bank to ensure comparability based upon the following criteria:

1. Asset size

2. Profitability

3. Capital Level

4. Balance Sheet Mix

5. Operating Strategy

6. Date of conversion

1. Asset Size: The Comparable Group should have a similar asset size to the Bank. The Comparable Group ranged in size from $555 million to $2.8 billion in total assets with a median of $1.4 billion. The Bank’s asset size was $1.1 billion as of December 31, 2023. On a pro forma basis, the Bank’s assets are projected to grow to approximately $1.3 billion at the midpoint of the estimated value range.

2. Profitability: The Comparable Group had a median ROAA of 0.35% and a median ROAE of 3.88% for the last twelve months. The Comparable Group profitability measures had a dispersion about the mean for the ROAA measure ranging from a low of (0.83)% to a high of 2.84%, while the ROAE measure ranged from a low of (6.14)% to a high of 15.85%. The Bank had a ROAA of 0.11% and a ROAE of 0.73% for the twelve months ended December 31, 2023.

3. Capital Level: The Comparable Group had a median equity to assets ratio of 13.11% with a high of 17.86% and a low of 6.99%. On December 31, 2023, the Bank had an equity to assets ratio of 13.93%. The increase in the Bank’s pro forma equity ratio will be favorable from a risk perspective and in terms of future earnings potential that could be realized through leverage. At the same time, the Bank’s higher pro forma equity ratio will depress return on equity. Both the Bank’s pro forma equity and the Peer Group’s equity ratios reflected surpluses with respect to the regulatory capital requirements. On a pro forma basis, the Bank’s regulatory surpluses will be higher than the Peer Group figures after the conversion.

4. Balance Sheet Mix: As of December 31, 2023, the Bank had a gross loans held for investment to asset ratio of 61.21%. The median loan to asset ratio for the Comparables was 76.32%, ranging from a low of 55.83% to a high of 87.69%. On the liability side, the Bank’s deposit to asset ratio was 68.39% at December 31, 2023 while the Comparable median was 77.63%, ranging from 54.81% to 87.69%. The Bank’s borrowing to asset ratio of 15.30% is above the Comparable median of 6.60%. The Bank’s Wholesale Funding ratio of 27.90% is above the Comparable median of 18.61%.

5. Operating Strategy: An institution’s operating characteristics are important because they determine future performance. Operational strategy also affects expected rates of return and investors’ general perception of the quality, risk and attractiveness of a given company. Specific operating characteristics include profitability, balance sheet growth, asset quality, capitalization and non-financial factors such as management strategies and lines of business.

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Conversion Valuation Appraisal Report

6. Date of Conversion Recent conversions or second steps, those completed on or after January 1, 2022, were excluded since the earnings of a newly converted institution do not reflect the reinvestment of conversion proceeds. Additionally, new issues tend to trade at a discount to the market averages.

Based on the above analysis, FinPro concluded that the Peer Group forms a reasonable basis for determining the pro forma market value of the Bank. Such general characteristics as asset size, capital position, interest-earning asset composition, funding composition, core earnings measures, loan composition, credit quality and exposure to interest rate risk all tend to support the reasonability of the Peer Group from a financial standpoint. Those areas where differences exist will be addressed in the form of valuation adjustments to the extent necessary.

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Conversion Valuation Appraisal Report

4. Market Value Determination

MARKET VALUE ADJUSTMENTS

The estimated pro forma market value of the Bank, along with certain adjustments to its value relative to market values for the Comparable Group are delineated in this section. The adjustments are made from potential investors’ viewpoint and are adjustments necessary when comparing the Bank to the Comparable Group. The adjustment factors are subjectively weighed using the appraiser’s knowledge and expertise and an aggregate adjustment is determined. Potential investors include depositors holding subscription rights and unrelated parties who may purchase stock in the community offering and who are assumed to be aware of all relevant and necessary facts as they pertain to the value of the Bank relative to other publicly traded thrift institutions and relative to alternative investment opportunities.

There are numerous criteria on which the market value adjustments are based. The major criteria utilized for purposes of this report include:

Adjustments Relative to the Comparable Group:

• Financial Condition

• Balance Sheet Growth

• Earnings Quality, Predictability and Growth

• Market Area

• Cash Dividends

• Liquidity of the Issue

• Recent Regulatory Matters

Adjustments for Other Factors:

• Management

• Subscription Interest

To ascertain the market value of the Bank, the median trading multiple values for the Comparable Group are utilized as the starting point. The adjustment, up or down, to the Comparable Group median multiple values is made based on the comparison of the Bank to the Comparable Group.

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Conversion Valuation Appraisal Report

FINANCIAL CONDITION

The balance sheet strength of an institution is an important market value determinant, as the investment community considers such factors as cash liquidity, capitalization, asset composition, funding mix, intangible levels and interest rate risk in assessing the attractiveness of investing in the common stock of a thrift. The following figures summarize the key financial elements of the Bank measured against the Comparable Group.

Figure– Key Balance Sheet Data

	Balance Sheet (Composition & Liquidity)
Company Name	Total Assets ($000s)		Securities/ Assets (%)		Gross Loans HFI/ Total Assets (%)		Deposits/ Assets (%)		Gross Loans HFI/Deposits (%)		Debt and Borrowings/ Assets (%)		Nonint. Bearing Deposits/ Total Deposits (%)		Cash/Deposits (%)		Wholesale Funding Ratio (%)(1)
1895 Bancorp of Wisconsin, Inc. (NASDAQCM:BCOW)		554,576		20.32		69.66		69.78		99.83		14.15		18.71		6.87		15.42
Affinity Bancshares, Inc. (NASDAQCM:AFBI)		843,258		10.46		78.25		79.98		97.84		4.74		22.94		7.42		23.28
Blue Foundry Bancorp (NASDAQGS:BLFY)		2,044,963		16.50		76.32		60.88		125.37		20.75		NA		3.70		32.04
ESSA Bancorp, Inc. (NASDAQGS:ESSA)		2,225,438		16.11		77.30		71.46		108.17		16.69		16.64		2.97		28.96
Finward Bancorp (NASDAQCM:FNWD)		2,108,279		17.93		71.75		86.01		83.41		5.60		16.30		4.74		7.90
HMN Financial, Inc. (NASDAQGM:HMNF)		1,107,135		NA		77.45		88.23		87.79		1.19		NA		1.14		12.37
Home Federal Bancorp, Inc. of Louisiana (NASDAQCM:HFBL)		654,188		16.64		77.48		89.22		86.83		2.30		23.34		1.49		1.42
IF Bancorp, Inc. (NASDAQCM:IROQ)		910,783		NA		NA		74.45		NA		16.30		NA		NA		21.79
Northeast Community Bancorp, Inc. (NASDAQCM:NECB)		1,719,945		1.99		87.69		79.40		110.44		3.87		22.64		7.82		28.01
Ponce Financial Group, Inc. (NASDAQGM:PDLB)		2,750,722		21.86		69.87		54.81		127.49		26.07		16.14		9.23		36.46
Sterling Bancorp, Inc. (Southfield, MI) (NASDAQCM:SBT)		2,416,003		18.70		55.83		82.95		67.31		2.59		1.76		29.10		2.41
William Penn Bancorporation (NASDAQCM:WMPN)		826,031		31.78		57.00		75.86		75.13		7.61		9.31		2.81		7.82
25% Percentile:		838,951		16.21		69.77		71.04		85.12		3.55		16.14		2.89		7.88
Median:		1,413,540		17.28		76.32		77.63		97.84		6.60		16.64		4.74		18.61
75% Percentile:		2,137,569		19.92		77.46		83.71		109.30		16.40		22.64		7.62		28.25
Fidelity Bank		1,124,932		22.21		61.21		68.39		85.73		15.30		19.73		11.32		27.90
Adjustment Factor:		—		—		—		—		+		—		+		—		—
Collective Adjustment:		Modest Downward

(1) Borrowings (ex. Sub Debt/TruPs) + Brokered & Listing Service Deposits as a % of Total Deposits and Borrowings

Data is: LTM (Last 12 Months)

Source: S&P Global, Offering Circular and FinPro Computations

Asset Size – The Bank, at $1.1 billion, is slightly smaller than the comparable group median. The Comparable Group median is larger than the assets of the Bank, with median assets of $1.4 billion. At the pro forma midpoint of the offering range, the Bank is expected to have assets of $1.3 billion, generally in line to slightly below the peers.

Asset Composition – The Bank’s gross loans held for investment to assets ratio of 61.21% is below the Comparable Group median of 76.63%. The Bank has a higher level of cash and securities as a percentage of assets compared to the Comparable Group.

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Conversion Valuation Appraisal Report

Funding Mix – The Bank’s deposits to asset ratio of 68.39% is below the Comparable Group median of 77.63%. Gross loans to deposit ratio of the Bank is below peers. The Bank utilizes a higher level of borrowings and debt compared to the Comparable Group. The Bank funds itself through deposits, 68.39% of assets, and borrowings, 15.30% of assets. The Comparable Group has a deposit to assets ratio of 77.63% and a debt and borrowings to asset ratio of 6.60%. The Bank has a higher usage of wholesale, 27.90%, compared to the Comparable Group median of 18.61%. Lastly, the Bank has a higher amount of non-interest-bearing deposits as a percentage of total deposits, 19.73%, compared to the Comparable Group median of 16.64%.

Interest Rate Risk – The Bank’s interest rate risk position is illustrated and discussed previously. The Bank’s profile appears to be within acceptable regulatory parameters. No similar data is available for the Comparable Group.

Figure– Capital Data

Company Name	Capitalization
	Equity/ Assets (%)		Tangible Equity/ Tangible Assets (%)		Tangible Common Equity/ Tangible Assets (%)		Tier 1 Leverage Ratio (%)		Tier 1 Risk Based Ratio (%)		Risk Based Capital Ratio (%)
1895 Bancorp of Wisconsin, Inc. (NASDAQCM:BCOW)		12.65		12.65		12.65		NA		NA		16.12
Affinity Bancshares, Inc. (NASDAQCM:AFBI)		14.41		12.50		12.50		NA		NA		13.39
Blue Foundry Bancorp (NASDAQGS:BLFY)		17.39		17.37		17.37		NA		NA		21.25
ESSA Bancorp, Inc. (NASDAQGS:ESSA)		9.92		9.35		9.35		NA		NA		13.01
Finward Bancorp (NASDAQCM:FNWD)		6.99		5.84		5.84		7.80		10.40		11.36
HMN Financial, Inc. (NASDAQGM:HMNF)		9.73		9.66		9.66		NA		NA		12.37
Home Federal Bancorp, Inc. of Louisiana (NASDAQCM:HFBL)		8.04		7.42		7.42		NA		NA		13.87
IF Bancorp, Inc. (NASDAQCM:IROQ)		8.10		8.10		8.10		NA		NA		NA
Northeast Community Bancorp, Inc. (NASDAQCM:NECB)		15.84		15.83		15.83		NA		NA		13.50
Ponce Financial Group, Inc. (NASDAQGM:PDLB)		17.86		17.86		9.68		NA		NA		25.10
Sterling Bancorp, Inc. (Southfield, MI) (NASDAQCM:SBT)		13.56		13.56		13.56		13.95		NA		NA
William Penn Bancorporation (NASDAQCM:WMPN)		15.61		15.07		15.07		NA		NA		NA
25% Percentile:		9.32		9.04		9.04		9.34		10.40		13.01
Median:		13.11		12.58		11.09		10.88		10.40		13.50
75% Percentile:		15.67		15.26		13.94		12.41		10.40		16.12
Fidelity Bank		13.93		13.42		13.48		14.80		22.67		23.52
Adjustment Factor:		—		=		—		—		—		—
Collective Adjustment:		Downward

Data is: LTM (Last 12 Months)

Source: S&P Global, Offering Circular and FinPro Computations

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Conversion Valuation Appraisal Report

Capitalization – The Comparable Group’s median equity to assets ratio of 13.11% is below the Bank’s ratio of 13.93%. The Bank’s Tier One Leverage and Risk Based Capital Ratios of 14.80% and 23.52%, respectively, are well above the peer medians of 10.88% and 13.50%. The Bank has not leveraged the existing balance sheet to the same level of capital ratios as have the comparable group.

The Bank’s pro forma Tier 1 Leverage ratio is projected to increase at the midpoint of the valuation range. The Bank currently operates with a tangible equity/assets ratio which is above the Comparable Group’s median on a pre-conversion basis. Following the stock offering, the Bank’s holding company’s pro forma capital position will continue to well exceed the Comparable Group’s figures by a material amount. In summary, FinPro concluded that capital strength was a downward factor in our adjustment for financial condition.

Intangible Levels – An important factor influencing market values is the level of intangibles that an institution carries on its books. Eight of the Comparables have intangible assets. The Bank does also have $5.8 million of goodwill on the balance as an intangible assets on December 31, 2023.

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Conversion Valuation Appraisal Report

Asset Quality – The asset quality of an institution is an important determinant of market value. The investment community considers levels of nonperforming loans, Real Estate Owned (“REO”) and levels of Loan Loss Reserves (“LLR”, “ACL” or “ALLL”) in assessing the attractiveness of investing in the common stock of an institution.

Figure– Asset Quality Data

Company Name	Asset Quality
	Adjusted Texas Ratio (%)(1,2)		NPA & Loans 90+ PD/ Tangible Equity + LLR (%)			Texas Ratio (%)(2)		Nonaccrual Loans/ Loans (%)		NPLs/Loans (%)		NPAs/ Assets (%)		NPA ex. Performing TDRs/ Total Assets (%)		LLR/ Gross Loans (%)		NCOs/ Avg Loans (%)
1895 Bancorp of Wisconsin, Inc. (NASDAQCM:BCOW)		1.93		NA	��		1.77		0.18		0.18		NA		NA		0.93		(0.01	)
Affinity Bancshares, Inc. (NASDAQCM:AFBI)		9.51		NA			10.40		NA		NA		NA		NA		1.35		0.03
Blue Foundry Bancorp (NASDAQGS:BLFY)		2.43		NA			2.33		0.38		0.38		0.32		0.32		0.91		—
ESSA Bancorp, Inc. (NASDAQGS:ESSA)		7.67		NA			6.72		NA		NA		NA		NA		0.90		0.04
Finward Bancorp (NASDAQCM:FNWD)		7.78		9.17			8.39		0.64		0.64		0.52		0.52		1.24		0.13
HMN Financial, Inc. (NASDAQGM:HMNF)		1.19		NA			3.72		0.44		0.44		NA		NA		1.38		—
Home Federal Bancorp, Inc. of Louisiana (NASDAQCM:HFBL)		2.49		NA			3.47		NA		NA		NA		NA		1.00		0.08
IF Bancorp, Inc. (NASDAQCM:IROQ)		0.21		NA			0.04		NA		NA		NA		NA		1.20		—
Northeast Community Bancorp, Inc. (NASDAQCM:NECB)		2.33		2.11			2.25		0.29		0.29		0.34		0.34		0.32		0.05
Ponce Financial Group, Inc. (NASDAQGM:PDLB)		4.54		NA			3.58		0.88		1.15		NA		NA		1.35		0.53
Sterling Bancorp, Inc. (Southfield, MI) (NASDAQCM:SBT)		1.44		2.51			2.62		0.66		0.66		0.37		0.37		2.18		0.36
William Penn Bancorporation (NASDAQCM:WMPN)		3.01		2.48			2.71		0.64		0.64		0.39		0.38		0.76		—
25% Percentile:		1.81		2.39			2.31		0.36		0.36		0.34		0.34		0.90		—
Median:		2.46		2.50			3.09		0.54		0.54		0.37		0.37		1.10		0.04
75% Percentile:		5.32		4.18			4.47		0.65		0.65		0.39		0.38		1.35		0.09
Fidelity Bank		5.33		5.94			5.40		1.11		1.24		0.83		0.75		0.90		0.27
Adjustment Factor:		=		—			=		—		—		—		—		—		—
Collective Adjustment:		Downward

Source: S&P Global, Offering Circular and FinPro Computations

The Bank’s level of nonperforming loans (“NPL”) to total loans, at 1.24%, is above the Comparable Group median at 0.54%. The Bank had a nonperforming asset to assets ratio of 0.83%, which is above the Comparable median of 0.37%. The Bank’s reserve level, 0.90% of total loans, is below the Comparable median of 1.10% of loans. The Bank’s level of charge offs of 0.27% is above the Comparable Groups of 0.04%.

The Bank’s asset mix is weaker than the Comparable Group’s. The Bank has a lower level of deposits and a higher level of borrowings and wholesale funding as a percentage of assets relative to the Comparable Group. The Bank has higher capital levels, and at the midpoint of the range will have significantly higher capital levels. The Bank has a higher levels of NPLs and NPAs, and the Bank’s reserve levels as a percentage of loans are below the Comparable levels. Taken collectively, a downward adjustment is warranted for financial condition.

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Conversion Valuation Appraisal Report

BALANCE SHEET GROWTH

The Bank’s assets, loan and deposits have grown slower than the Comparable Group. The Bank experienced deposit runoff and subsequent asset declines, relative to growth for the Comparable Group.

Figure– Growth Rate Data

Company Name	Growth Rates
	Asset Growth Rate (%)			Loan Growth Rate (%)			Deposit Growth Rate (%)
1895 Bancorp of Wisconsin, Inc. (NASDAQCM:BCOW)		4.92			7.93			1.41
Affinity Bancshares, Inc. (NASDAQCM:AFBI)		10.13			1.65			9.86
Blue Foundry Bancorp (NASDAQGS:BLFY)		2.46			5.29			(4.04	)
ESSA Bancorp, Inc. (NASDAQGS:ESSA)		23.30			16.85			19.81
Finward Bancorp (NASDAQCM:FNWD)		2.05			(0.15	)		2.26
HMN Financial, Inc. (NASDAQGM:HMNF)		10.22			14.92			9.73
Home Federal Bancorp, Inc. of Louisiana (NASDAQCM:HFBL)		13.69			23.64			13.07
IF Bancorp, Inc. (NASDAQCM:IROQ)		7.92			12.87			4.64
Northeast Community Bancorp, Inc. (NASDAQCM:NECB)		36.11			34.06			37.56
Ponce Financial Group, Inc. (NASDAQGM:PDLB)		21.42			28.72			2.63
Sterling Bancorp, Inc. (Southfield, MI) (NASDAQCM:SBT)		(0.15	)		(16.13	)		4.47
William Penn Bancorporation (NASDAQCM:WMPN)		(2.50	)		(0.04	)		0.50
25% Percentile:		2.36			1.23			2.05
Median:		9.03			10.40			4.56
75% Percentile:		15.62			18.55			10.66
Fidelity Bank		11.68			20.52			(2.81	)
Adjustment Factor:		=			+			–
Collective Adjustment:		No Adjustment

Data is: LTM (Last 12 Months)

Source: S&P Global, Offering Circular and FinPro Computations

Growth Rate – The Bank’s asset growth rate is above that of the peer group, 11.68% for the Bank, compared to 9.03% for the Comparable Group. However, much of the Bank’s 2023 asset growth was driven by increased usage of borrowings and other wholesale funding sources. The Bank’s loan growth rate is significantly above peers. The deposit growth rate is below peers, even as the Bank has increased wholesale deposit usage and has wholesale usage above the Comparable Group.

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Conversion Valuation Appraisal Report

The Bank had higher levels of asset and loan growth compared to the Comparable group and experienced deposit runoff compared to growth by the peers. Taken collectively, no adjustment is warranted.

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Conversion Valuation Appraisal Report

EARNINGS QUALITY, PREDICTABILITYAND GROWTH

The earnings quality, predictability and growth are critical components in the establishment of market values for thrifts. Thrift earnings are primarily a function of:

• net interest income

• loan loss provision

• non-interest income

• non-interest expense

The quality and predictability of earnings is dependent on both internal and external factors. Some internal factors include the mix of the balance sheet, the interest rate sensitivity of the balance sheet, the asset quality, and the infrastructure in place to deliver the assets and liabilities to the public. External factors include the competitive market for both assets and liabilities, the global interest rate scenario, local economic factors and regulatory issues.

Investors are focusing on earnings sustainability as interest rate volatility has caused a wide variation in income levels. With the intense competition for both assets and deposits, banks cannot easily replace lost spread and margin with balance sheet growth.

Each of these factors can influence the earnings of an institution, and each of these factors is volatile. Investors prefer stability and consistency. As such, solid, consistent earnings are preferred to high but risky earnings. Investors also prefer earnings to be diversified and not entirely dependent on interest income.

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Conversion Valuation Appraisal Report

Net income trended downwards between the twelve months ended December 31, 2023, and December 31, 2022. The decrease is predominately attributable to higher non-interest expenses, which was a function of mortgage originations operations, higher data processing, hedging activity and other general expenses. The Bank in the past few years has elevated non-interest expenses and lower net income as a result of larger mortgage operations for sale. During this time frame net interest income rose 7.2% from $41.6 million for the twelve months ended December 31, 2022, to $44.2 million for the twelve months ended December 31, 2023.

The Bank’s net income has historically experienced significant reliance upon Net Gain on Sale of Loans and Leases which has declined over the past two years. The Bank’s mortgage banking activities increase the potential of volatility of the Bank’s projected earnings streams.

Figure– Income Statement Data

FIDELITY BANK

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DEC EMBER 31, 2023 AND 2022

	2023			2022
	(dollars in thousands)
Interest income
Interest and fees on loans	$	43,287		$	35,481
Interest and dividends on investment securities		9,278			5,927
Interest on deposits in other banks		1,733			2,402
Total interest and dividend income		54,298			43,810
Interest expense
Deposits		6,762			1,797
Borrowed funds					447
Total interest expense		10,130			2,244
Net interest income		44,168			41,566
Provision for credit losses		649			(396	)
Net interest income after provision for credit losses		43,519			41,962
Non-interest income
Service charges and fee income from deposit accounts		3,160			3,547
Gain on sale of mortgage loans		12,526			14,477
Gam (loss) on sales and disposal of assets		(1	)		9
Gain on sale of available for sale securities		66			135
Gam on sale of mortgage servicing rights		5,318
Other non-interest income		3,856			4,373
Total non-interest income		24,925			22,541
Non-interest expenses
Salaries and employee benefits		40,729			41,953
Occupancy and equipment		8,067			8,238
Directors’ fees		806			748
Data processing		4,683			3,665
Advertising and marketing		1,755			1,785
Mortgage servicing rights amortization		1,763			3,079
Hedging activity, net		247			(4,904	)
Other general and administrative		8,946			7,834
Total non-interest expenses		66,996			62,398
Net income before income taxes		1,448			2,105
Income tax expense (benefit)		330			(5	)
Net income	$	1,118		$	2,110

Source: Bank Financial Reports

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Conversion Valuation Appraisal Report

The Bank’s ROAA and ROAE are below the Comparable Group median. The Bank’s higher capitalization following the offering is expected to further decrease return on equity for the near term, though the potential payoff of higher cost borrowings with the proceeds will improve net income.

The Bank’s net interest margin is above the Comparable Group median. The Bank’s margin is improved as a result of interest earned on sold loans. Additionally, the Bank’s cost of funds is below all comparable group peers.

The Bank’s efficiency ratio of 96.96% is below the Comparable median of 81.22%.

On a forward-looking basis, after the conversion the Bank’s operating expenses are expected to rise as a result of the stock benefit plans and additional costs of being a public company. At the same time, the Bank will have additional capital to deploy and leverage to improve forward earnings.

Figure– Income Statement Data

Company Name	Overall Profitability						Components of Profitability
	ROAA (%)			ROAE (%)			Yield on Earning Assets (%)(1)	Cost of Funds (%)(1)		Net Interest Margin (FTE) (%)		Noninterest Income/Avg Assets (%) (1)		Noninterest Expense/Avg Assets (%) (1)		Efficiency Ratio (FTE) (%)
1895 Bancorp of Wisconsin, Inc. (NASDAQCM:BCOW)		(0.83	)		(6.14	)	3.81		1.74		2.46		0.43		2.66		97.13
Affinity Bancshares, Inc. (NASDAQCM:AFBI)		0.75			5.43		5.26		2.09		3.41		0.30		2.45		69.12
Blue Foundry Bancorp (NASDAQGS:BLFY)		(0.36	)		(1.98	)	3.94		2.23		2.26		0.08		2.32		102.03
ESSA Bancorp, Inc. (NASDAQGS:ESSA)		0.86			8.18		4.69		1.83		3.21		0.38		2.22		64.59
Finward Bancorp (NASDAQCM:FNWD)		0.40			6.28		4.60		1.42		2.71		0.50		2.58		81.22
HMN Financial, Inc. (NASDAQGM:HMNF)		0.54			5.03		3.97		1.29		2.98		0.61		2.50		71.10
Home Federal Bancorp, Inc. of Louisiana (NASDAQCM:HFBL)		0.68			8.83		4.91		1.54		3.68		0.31		2.49		66.26
IF Bancorp, Inc. (NASDAQCM:IROQ)		0.23			2.72		NA		2.27		2.41		0.48		2.32		81.25
Northeast Community Bancorp, Inc. (NASDAQCM:NECB)		2.84			15.85		8.47		2.69		6.52		0.25		2.20		33.75
Ponce Financial Group, Inc. (NASDAQGM:PDLB)		0.13			0.68		5.12		2.97		2.68		0.39		2.48		82.84
Sterling Bancorp, Inc. (Southfield, MI) (NASDAQCM:SBT)		0.30			2.35		5.23		2.78		2.84		0.13		3.64		NA
William Penn Bancorporation (NASDAQCM:WMPN)		0.11			0.59		4.18		1.75		2.76		0.30		2.41		86.91
25% Percentile:		0.12			0.66		4.08		1.69		2.63		0.29		2.32		67.69
Median:		0.35			3.88		4.69		1.96		2.80		0.35		2.47		81.22
75% Percentile:		0.70			6.75		5.18		2.38		3.26		0.44		2.52		84.88
Fidelity Bank		0.11			0.73		6.02		1.15		4.72		1.78		6.04		96.96
Adjustment Factor:		—			—		+		+		+		+		—		—
Collective Adjustment:		Modest Downward

Data is: LTM (Last 12 Months)

(1) Bank’s results based upon call report designation for non-interest expenses

Source: S&P Global, Call Reports and FinPro Computations

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Conversion Valuation Appraisal Report

The Bank is less profitable than the Comparables on a ROAA and ROAE basis. After the conversion, the Bank is expected to have a lower ROAE. The Bank’s earnings composition is more volatile than the Comparable Group as the Bank has a higher net margin and noninterest expense, along with a historical focus on mortgage banking. Taken collectively, a modest downward adjusted is warranted for this factor.

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Conversion Valuation Appraisal Report

MARKETAREA

The market area that an institution serves has a significant impact on value, as future success is interrelated with the economic, demographic and competitive aspects of the market. The location of an institution will have an impact on the trading value of an institution, as many analysts compare the pricing of institutions relative to a state or regional multiples in investor presentations.

The following figure compares the demographic for the market areas serviced by the Bank, to the demographics of the Comparable Group members.

Figure– Market Demographics For Comparables

Company	Fidelity Bank Current 2024			1895 Bancorp of Wisconsin, Inc. (NASDAQC M:BCOW) Current 2024			Affinity Bancshares, Inc. (NASDAQC M:AFBI) Current 2024		Blue Foundry Bancorp (NASDAQG S:BLFY) Current 2024			ESSA Bancorp, Inc. (NASDAQG S:ESSA) Current 2024			Finward Bancorp (NASDAQC M:FNWD) Current 2024			HMN Financial, Inc. (NASDAQ GM:HMNF) Current 2024		Home Federal Bancorp, Inc. of Louisiana (NASDAQ CM:HFBL) Current 2024			IF Bancorp, Inc. (NASDAQ CM:IROQ) Current 2024			Northeast Community Bancorp, Inc. (NASDAQ CM:NECB) Current 2024			Ponce Financial Group, Inc. (NASDAQ GM:PDLB) Current 2024			Sterling Bancorp, Inc. (Southfield, MI) (NASDAQ CM:SBT) Current 2024			William Penn Bancorporation (NASDAQC M:WMPN) Current 2024			Comparable Group Median Current 2024
Population
Population (actual)		21,519			7,810			37,933		20,371			64,040			49,588			35,459		23,465			28,642			36,595			34,749			23,800			17,255			31,696
Aggregate Change: CAGR (%)		(0.41	)		(0.17	)		1.27		0.01			(0.06	)		(0.06	)		0.21		(0.89	)		(0.91	)		(0.32	)		(1.70	)		(0.87	)		(0.07	)		(0.12	)
Market Weighted Change: CAGR (%)		(0.58	)		(0.27	)		0.91		0.02			(0.05	)		(0.25	)		0.23		(0.88	)		(0.88	)		(0.20	)		(1.43	)		(1.31	)		(0.11	)		(0.23	)
Age brackets (actual)
Population 0-14 (actual)		3,768			1,386			6,761		3,286			9,817			8,920			6,708		4,454			5,135			7,003			6,079			3,660			2,772			5,607
Population 15-34 (actual)		5,573			2,016			10,464		4,969			16,216			12,745			8,835		5,958			7,093			9,772			9,953			6,459			4,409			7,964
Population 35-54 (actual)		5,436			1,924			9,914		5,331			14,986			12,419			8,613		5,768			6,463			8,886			9,200			6,614			4,278			7,614
Population 55-69 (actual)		4,005			1,492			6,838		4,133			14,206			9,362			6,570		4,244			5,575			6,722			5,988			4,289			3,514			5,782
Population 70+ (actual)		2,736			992			3,956		2,650			8,816			6,142			4,734		3,042			4,377			4,214			3,528			2,778			2,282			3,742
Percent of total (%)
Pop Age 0-14/ Pop (%)		17.51			17.75			17.82		16.13			15.33			17.99			18.92		18.98			17.93			19.14			17.49			15.38			16.06			17.79
Pop Age 15-34/ Pop (%)		25.90			25.81			27.59		24.39			25.32			25.70			24.92		25.39			24.76			26.70			28.64			27.14			25.55			25.63
Pop Age 35-54/ Pop (%)		25.26			24.64			26.14		26.17			23.40			25.04			24.29		24.58			22.56			24.28			26.48			27.79			24.79			24.71
Pop Age 55-69/ Pop (%)		18.61			19.10			18.03		20.29			22.18			18.88			18.53		18.09			19.46			18.37			17.23			18.02			20.37			18.70
Pop Age 70+/ Pop (%)		12.71			12.70			10.43		13.01			13.77			12.39			13.35		12.96			15.28			11.52			10.15			11.67			13.23			12.83
Households (actual)		8,787			3,251			13,752		7,445			24,219			19,555			14,179		9,654			11,805			12,680			12,570			8,626			6,623			12,188
Aggregate Change: CAGR (%)		(0.23	)		0.08			1.37		(0.01	)		0.11			0.12			0.27		(0.76	)		(0.77	)		(0.38	)		(1.63	)		(0.83	)		0.04			0.02
Market Weighted Change: CAGR (%)		(0.36	)		(0.03	)		1.00		(0.01	)		0.11			(0.05	)		0.30		(0.73	)		(0.74	)		(0.28	)		(1.41	)		(1.29	)		(0.01	)		(0.04	)
Income
Per Capita Income ($)		37,167			43,498			45,031		60,269			40,562			39,386			46,256		31,641			33,308			54,282			59,344			72,831			49,582			45,644
National Median Per Capita ($)		42,767			42,767			42,767		42,767			42,767			42,767			42,767		42,767			42,767			42,767			42,767			42,767			42,767			42,767
Median Household Income ($)		58,328			75,216			89,899		113,359			82,322			71,550			85,362		51,954			60,398			100,530			79,573			121,527			91,775			83,842
Income brackets (actual)
HH w Income < $25K (actual)		1,966			493			1,647		794			3,332			3,439			1,692		2,506			2,434			2,236			3,301			1,102			927			1,9364
HH w Income $25K-$49K (actual)		1,817			590			2,192		908			4,181			3,958			2,267		2,276			2,775			1,938			2,444			1,101			947			2,230
HH w Income $50K-$99K (actual)		2,485			934			4,214		1,674			6,963			5,594			4,322		2,541			3,584			3,005			3,232			1,940			1,716			3,119
HH: Annual Income $100K+ (actual)		2,519			1,233			5,698		4,070			9,743			6,565			5,899		2,331			3,013			5,500			3,593			4,483			3,033			4,277
Percent of total (%)
HH w Income < $25K/ HH (%)		22.37			15.16			11.98		10.66			13.76			17.59			11.93		25.96			20.62			17.63			26.26			12.78			14.00			14.58
HH w Income $25K-$49K/ HH (%)		20.68			18.15			15.94		12.20			17.26			20.24			15.99		23.58			23.51			15.28			19.44			12.76			14.30			16.63
HH w Income $50K-$99K/ HH (%)		28.28			28.73			30.64		22.48			28.75			28.61			30.48		26.32			30.36			23.70			25.71			22.49			25.91			27.46
Annual Income $100K+/ HH (%)		28.67			37.93			41.43		54.67			40.23			33.57			41.60		24.15			25.52			43.38			28.58			51.97			45.79			40.83

Source: S&P Global

The Bank’s market demographics of the Bank represent a market that’s population has shrunk more than the median of the comparable group. The Bank’s per capita and median household income are both below the Comparable Group’s markets. Based upon these factors, a moderate downward adjustment is warranted for market area.

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Conversion Valuation Appraisal Report

CASH DIVIDENDS

Currently, most conversions are not establishing a dividend policy concurrent with the conversion. Historical issues have been fully or oversubscribing without the need for the additional enticement of dividends. After the conversion is another issue, however. Pressures on ROAE and on internal rates of return to investors prompted the industry toward cash dividends. This trend is exacerbated by the lack of growth in the market and tighter liquidity conditions. Typically, when institutions are in a growth mode, they issue stock dividends or do not declare a dividend. When growth is stunted, these institutions shift toward reducing equity levels and thus utilize cash dividends as a tool in managing equity. Historical tax code changes have made cash dividends more attractive to investors.

Figure– Dividends

Company Name	Dividends
	Quarterly Dividends Per Share ($)		LTM Dividends Per Share ($)		LTM Dividend Payout Ratio (%)		Dividend Yield (%)
1895 Bancorp of Wisconsin, Inc. (NASDAQCM:BCOW)		NA		—		NM		NA
Affinity Bancshares, Inc. (NASDAQCM:AFBI)		NA		—		NM		NA
Blue Foundry Bancorp (NASDAQGS:BLFY)		NA		—		NM		NA
ESSA Bancorp, Inc. (NASDAQGS:ESSA)		0.15		0.60		32.43		3.22
Finward Bancorp (NASDAQCM:FNWD)		0.12		1.05		53.57		1.98
HMN Financial, Inc. (NASDAQGM:HMNF)		0.08		0.32		23.36		1.44
Home Federal Bancorp, Inc. of Louisiana (NASDAQCM:HFBL)		0.13		0.50		33.90		3.71
IF Bancorp, Inc. (NASDAQCM:IROQ)		0.10		0.40		66.67		2.35
Northeast Community Bancorp, Inc. (NASDAQCM:NECB)		0.06		0.24		8.39		1.43
Ponce Financial Group, Inc. (NASDAQGM:PDLB)		NA		—		NM		NA
Sterling Bancorp, Inc. (Southfield, MI) (NASDAQCM:SBT)		—		—		NM		—
William Penn Bancorporation (NASDAQCM:WMPN)		0.03		0.12		150.00		0.97
25% Percentile:		0.05		—		27.90		1.31
Median:		0.09		0.18		33.90		1.71
75% Percentile:		0.12		0.42		60.12		2.57

Source: S&P Global, Call Reports and FinPro Computations

Seven of the twelve Comparable institutions had declared cash dividends. The median dividend payout ratio for the Comparable Group was 33.90%. Currently, the Bank does not pay a cash dividend as it is a mutual bank.

The Bank, on a pro forma basis (at the mid-point of the value range) will have a Tier One Leverage ratio above 18%. The Bank will have adequate capital and profits to pay cash dividends.

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Conversion Valuation Appraisal Report

As such, no adjustment is warranted for this factor.

RECENT REGULATORY MATTERS

Regulatory matters influence the market for thrift conversions. The Bank will operate in substantially the same regulatory environment as the Comparable Group.

Fidelity Bank is subject to comprehensive regulation and examination by the LOFI and the FDIC.

As such, no adjustment for this factor is warranted.

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Conversion Valuation Appraisal Report

5. Other Factors

MANAGEMENT

The Bank has developed a good management team with considerable banking experience. The Bank’s organizational chart is reasonable for an institution of its size and complexity. The Board is active and oversees and advises on all key strategic and policy decisions and holds the management to high performance standards.

As such, no adjustment appears to be warranted for this factor.

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Conversion Valuation Appraisal Report

LIQUIDITYOFTHESHARES

The Peer Group is by definition composed of companies that are traded in the public markets. All of the Peer Group companies trade on the NASDAQ. Typically, the number of shares outstanding and market capitalization provides an indication of how much liquidity there will be in a particular stock. The market capitalization of the Peer Group companies ranged from $40.1 million to $273.9 million as of February 2, 2024, with a median market value of $104.2 million.

FB Bancorp, Inc., is a newly formed company and has never issued capital stock. Fidelity Bank, as a mutual institution, is not authorized to issue capital stock. FB Bancorp, Inc. expects the common stock to be listed on the Nasdaq Capital Market under the symbol “FBLA” upon the completion of the conversion and stock offering.

Overall, we anticipate that the Bank’s stock will have a lower level of trading liquidity as the Peer Group companies on average and, therefore, we concluded that a downward was necessary for this factor.

Figure– Market Pricing and Valuation

Size / Regional Peers	Market Pricing and Valuation
Company Name	Date of Closing Price ($)		Market Cap. ($mil)		Price/MRQ Core EPS (x)		Price/LTM Core EPS (x)		Price/Tangible Book (%)		Tangible Premium/ Core Deposits (%)		LTM Dividend Payout Ratio (%)		Dividend Yield (%)		Avg Daily Volume (Three Month)		Avg Daily Volume (One Year)
1 1895 Bancorp of Wisconsin, Inc. (NASDAQCM:BCOW)		2/2/2024		46.3		NM		NM		71.3		-7.8		NM		NA		6,557		6,099
2 Affinity Bancshares, Inc. (NASDAQCM:AFBI)		2/2/2024		103.9		17.2		16.2		100.8		NA		NM		NA		3,368		5,885
3 Blue Foundry Bancorp (NASDAQGS:BLFY)		2/2/2024		210.9		NM		NM		65.0		NA		NM		NA		66,662		92,517
4 ESSA Bancorp, Inc. (NASDAQGS:ESSA)		2/2/2024		177.2		10.3		9.9		91.3		NA		32.4		3.2		22,485		22,913
5 Finward Bancorp (NASDAQCM:FNWD)		2/2/2024		104.5		14.6		11.1		85.8		NA		53.6		2.0		9,861		4,948
6 HMN Financial, Inc. (NASDAQGM:HMNF)		2/2/2024		97.0		17.8		16.7		92.9		NA		23.4		1.4		7,345		3,852
7 Home Federal Bancorp, Inc. of Louisiana (NASDAQCM:HFBL)		2/2/2024		41.0		9.6		8.0		87.8		NA		33.9		3.7		1,108		1,657
8 IF Bancorp, Inc. (NASDAQCM:IROQ)		2/2/2024		54.5		NA		NA		77.3		NA		66.7		2.4		2,187		2,816
9 Northeast Community Bancorp, Inc. (NASDAQCM:NECB)		2/2/2024		206.9		5.1		5.8		89.4		-6.4		8.4		1.4		56,478		80,262
10 Ponce Financial Group, Inc. (NASDAQGM:PDLB)		2/2/2024		205.0		NA		NA		82.5		NA		NM		NA		52,049		89,647
11 Sterling Bancorp, Inc. (Southfield, MI) (NASDAQCM:SBT)		2/2/2024		273.9		13.3		34.9		83.6		NA		NM		0.0		33,849		42,341
12 William Penn Bancorporation (NASDAQCM:WMPN)		2/2/2024		103.6		NM		129.1		96.0		NA		150.0		1.0		34,482		45,791
25% Percentile:				86.4		9.9		9.4		81.2		-7.5		27.9		1.3		5,760		4,674
Median:				104.2		13.3		13.6		86.8		-7.1		33.9		1.7		16,173		14,506
75% Percentile:				205.5		15.9		21.2		91.7		-6.8		60.1		2.6		38,874		54,409

Source: S&P Global, Call Reports and FinPro Computations

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Conversion Valuation Appraisal Report

MARKETINGOFTHEISSUANCE

Three separate markets exist for thrift stocks: (1) the after-market for public companies, both fully-converted stock companies and MHC’s, in which trading activity is regular and investment decisions are made based upon financial condition, earnings, capital, ROE, dividends and future prospects; (2) the new issue market in which converting thrifts are evaluated on the basis of the same factors but on a pro forma basis without the benefit of prior operations as a publicly-held Bank and stock trading history; and (3) the thrift acquisition market. All three of these markets were considered in the valuation of the Bank’s to-be-issue stock.

The Public Market- The value of publicly traded thrift stocks is easily measurable, and is tracked by most investment houses and related organizations. In general, thrift stock values react to market stimuli such as interest rates, inflation, perceived industry health, projected rates of economic growth, regulatory issues, and stock market conditions in general.

The New Issue Market- In addition to thrift stock market conditions in general, the new issue market for converting thrifts is also an important consideration in determining the Bank’s pro forma market value. The new issue market is separate and distinct from the market for seasoned thrift stocks in that the pricing ratios for converting issues are computed on a pro forma basis, specifically: (1) the numerator and denominator are both impacted by the conversion offering amount, unlike existing stock issues in which price change affects only the numerator; and (2) the pro forma pricing ratio incorporates assumptions regarding source and use of proceeds, effective tax rates, stock plan purchases, etc. which impact pro forma financials, whereas pricing for existing issues are based on reported financials. The distinction between pricing of converting and existing issues is perhaps no clearer than in the case of the price/book (“P/B”) ratio in that the P/B ratio of a converting thrift will typically result in a discount to book value whereas in the current market for existing thrifts the P/B ratio often reflects a premium to book value. Therefore, it is appropriate to also consider the market for new issues, both at the time of the conversion and in the aftermarket.

The Acquisition Market- Also considered in the valuation was the potential impact on the Banks holding company’s stock price of recently completed and pending acquisitions of other savings institutions operating in the region. There have been numerous bank and thrift acquisitions completed over the past number of years. To the extent that acquisition speculation may impact the Bank’s offering, we have largely taken this into account in selecting companies for the Peer Group which operate in markets that have experienced a comparable level of acquisition activity as the Bank’s market and, thus, are subject to the same type of acquisition speculation that may influence Bank’s stock. However, since converting thrifts are subject to a three-year regulatory moratorium from being acquired, acquisition speculation in the Bank’s stock would tend to be less compared to the stocks of the Peer Group companies.

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Conversion Valuation Appraisal Report

In determining our valuation adjustment for marketing of the issue, we considered trends in both the overall thrift market, the new issue market including the new issue market for thrift conversions and the Bank acquisition market for thrift stocks. Overall, current market conditions coupled with the potential change in interest rates impacting Banking industry leads to some future uncertainty. Taking these factors and trends into account, FinPro concluded that no adjustment was appropriate in the valuation analysis for purposes of marketing of the issue.

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Conversion Valuation Appraisal Report

VALUATION ADJUSTMENTS

Relative to the Comparables the following adjustments need to be made to the Bank’s pro forma market value.

Valuation Factor	Valuation Adjustment
Financial Condition	Downward
Balance Sheet Growth	No Adjustment
Earnings Quality, Predictability and Growth	Moderate Downward
Market Area	Moderate Downward
Dividends	No Adjustment
Liquidity of the Issue	Downward
Recent Regulatory Matters	No Adjustment

Additionally, the following adjustments should be made to the Bank’s market value.

Valuation Factor	Valuation Adjustment
Management	No Adjustment
Marketing of the Issuance	No Adjustment

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Conversion Valuation Appraisal Report

6. Valuation

In applying the accepted valuation methodology promulgated by the regulators, i.e., the pro forma market value approach, three key pricing multiples were considered. The three multiples include:

Price to core earnings (“P/E”)

Price to book value (“P/B”) / Price to tangible book value (“P/TB”)

Price to assets (“P/A”)

All of the approaches were calculated on a pro forma basis including the effects of the conversion proceeds. All of the assumptions utilized are presented.

DISCUSSIONOF WEIGHT GIVENTO VALUATION MULTIPLES

To ascertain the pro forma estimated market value of the Bank, the market multiples for the Comparable Group were utilized. As a secondary check, all publicly traded thrifts, Mid-west regional thrifts and recent (2017 to date) conversions along with historical standard conversions were assessed. The data for the Comparable Group, all publicly traded thrifts, and historical offerings are showing on the following pages.

Figure–Comparable Group Market Pricing and Valuation

Size / Regional Peers	Market Pricing and Valuation
Company Name	Date of Closing Price ($)		Market Cap. ($mil)		Price/ LTM EPS (x)(1)		Price/ LTM Core EPS (x)		Price/ Book (%)		Price/ Tangible Book (%)		Tangible Premium/ Core Deposits (%)		LTM Dividend Payout Ratio (%)		Dividend Yield (%)		Price/ Assets (%) (%)		Avg Daily Volume (Three Month)		Avg Daily Volume (One Year)
1 1895 Bancorp of Wisconsin, Inc. (NASDAQCM:BCOW)		2/2/2024		46.3		NM		NM		71.3		71.3		-7.8		NM		NA		7.8		6,557		6,099
2 Affinity Bancshares, Inc. (NASDAQCM:AFBI)		2/2/2024		103.9		16.5		16.2		85.5		100.8		NA		NM		NA		12.2		3,368		5,885
3 Blue Foundry Bancorp (NASDAQGS:BLFY)		2/2/2024		210.9		NM		NM		64.9		65.0		NA		NM		NA		11.6		66,662		92,517
4 ESSA Bancorp, Inc. (NASDAQGS:ESSA)		2/2/2024		177.2		10.1		9.9		85.6		91.3		NA		32.4		3.2		9.1		22,485		22,913
5 Finward Bancorp (NASDAQCM:FNWD)		2/2/2024		104.5		12.4		11.1		70.9		85.8		NA		53.6		2.0		5.1		9,861		4,948
6 HMN Financial, Inc. (NASDAQGM:HMNF)		2/2/2024		97.0		16.3		16.7		92.3		92.9		NA		23.4		1.4		9.3		7,345		3,852
7 Home Federal Bancorp, Inc. of Louisiana (NASDAQCM:HFBL)		2/2/2024		41.0		9.2		8.0		80.6		87.8		NA		33.9		3.7		NA		1,108		1,657
8 IF Bancorp, Inc. (NASDAQCM:IROQ)		2/2/2024		54.5		28.3		NA		77.3		77.3		NA		66.7		2.4		5.9		2,187		2,816
9 Northeast Community Bancorp, Inc. (NASDAQCM:NECB)		2/2/2024		206.9		5.9		5.8		89.4		89.4		-6.4		8.4		1.4		12.4		56,478		80,262
10 Ponce Financial Group, Inc. (NASDAQGM:PDLB)		2/2/2024		205.0		61.6		NA		82.5		82.5		NA		NM		NA		9.2		52,049		89,647
11 Sterling Bancorp, Inc. (Southfield, MI) (NASDAQCM:SBT)		2/2/2024		273.9		35.1		34.9		83.6		83.6		NA		NM		0.0		12.4		33,849		42,341
12 William Penn Bancorporation (NASDAQCM:WMPN)		2/2/2024		103.6		154.0		129.1		92.1		96.0		NA		150.0		1.0		14.2		34,482		45,791
25% Percentile:				86.4		10.7		9.4		75.8		81.2		-7.5		27.9		1.3		8.5		5,760		4,674
Median:				104.2		16.4		13.6		83.0		86.8		-7.1		33.9		1.7		9.3		16,173		14,506
75% Percentile:				205.5		33.4		21.2		86.5		91.7		-6.8		60.1		2.6		12.3		38,874		54,409

Source: S&P Global and FinPro Computations

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Conversion Valuation Appraisal Report

Figure–All Publicly Traded Thrifts Market Pricing and Valuation

		Market Pricing and Valuation
	Company Name	Date of Closing Price ($)		Market Cap. ($mil)		Price/ LTM EPS (x)(1)		Price/ LTM Core EPS (x)		Price/ Book (%)		Price/ Tangible Book (%)		Tangible Premium/ Core Deposits (%)		LTM Dividend Payout Ratio (%)		Dividend Yield (%)		Price/ Assets (%) (%)		Avg Daily   Volume   (Three Month)		Avg Daily   Volume   (One Year)
1	NSTS Bancorp, Inc. (NASDAQCM:NSTS)		2/2/2024		51.1		NM		NM		67.7		67.7		-18.9		NM		NA		19.5		5,302		6,517
2	Catalyst Bancorp, Inc. (NASDAQCM:CLST)		2/2/2024		57.0		85.6		134.9		67.4		67.4		NA		NM		NA		19.1		6,708		7,225
3	Generations Bancorp NY, Inc. (NASDAQCM:GBNY)		2/2/2024		24.8		NM		NM		71.1		72.5		-4.1		NM		NA		4.6		3,704		2,530
4	PB Bankshares, Inc. (NASDAQCM:PBBK)		2/2/2024		32.4		12.6		16.3		76.4		76.4		NA		NM		NA		8.3		3,662		3,369
5	Cullman Bancorp, Inc. (NASDAQCM:CULL)		2/2/2024		75.2		18.9		18.9		77.8		77.8		-12.2		21.1		1.1		18.3		5,264		2,915
6	TC Bancshares, Inc. (NASDAQCM:TCBC)		2/2/2024		58.0		NM		NM		79.5		79.5		-8.0		333.3		0.7		14.4		8,828		7,017
7	Central Plains Bancshares, Inc. (NASDAQCM:CPBI)		2/2/2024		42.4		NA		NA		NA		NA		NA		NA		NA		NA		28,639		37,694
8	1895 Bancorp of Wisconsin, Inc. (NASDAQCM:BCOW)		2/2/2024		46.3		NM		NM		71.3		71.3		-7.8		NM		NA		7.8		6,557		6,099
9	First Seacoast Bancorp, Inc. (NASDAQCM:FSEA)		2/2/2024		41.0		NM		NM		65.8		66.1		NA		NM		NA		6.7		15,979		11,818
10	Home Federal Bancorp, Inc. of Louisiana (NASDAQCM:HFBL)		2/2/2024		41.0		9.2		8.0		80.6		87.8		NA		33.9		3.7		NA		1,108		1,657
11	Carver Bancorp, Inc. (NASDAQCM:CARV)		2/2/2024		8.5		NM		NM		52.1		52.1		-1.6		NM		0.0		1.5		45,163		28,600
12	William Penn Bancorporation (NASDAQCM:WMPN)		2/2/2024		103.6		154.0		129.1		92.1		96.0		NA		150.0		1.0		14.2		34,482		45,791
13	Affinity Bancshares, Inc. (NASDAQCM:AFBI)		2/2/2024		103.9		16.5		16.2		85.5		100.8		NA		NM		NA		12.2		3,368		5,885
14	BV Financial, Inc. (NASDAQCM:BVFL)		2/2/2024		154.6		9.2		9.4		77.7		84.2		NA		NM		0.0		18.2		24,535		23,459
15	IF Bancorp, Inc. (NASDAQCM:IROQ)		2/2/2024		54.5		28.3		NA		77.3		77.3		NA		66.7		2.4		5.9		2,187		2,816
16	HMN Financial, Inc. (NASDAQGM:HMNF)		2/2/2024		97.0		16.3		16.7		92.3		92.9		NA		23.4		1.4		9.3		7,345		3,852
17	ECB Bancorp, Inc. (NASDAQCM:ECBK)		2/2/2024		127.9		24.8		25.1		75.7		75.7		-7.1		NM		NA		8.3		8,458		13,094
18	Broadway Financial Corporation (NASDAQCM:BYFC)		2/2/2024		56.6		104.7		100.5		366.3		470.3		-8.2		NM		0.0		53.3		5,586		7,118
19	Provident Financial Holdings, Inc. (NASDAQGS:PROV)		2/2/2024		105.8		13.2		13.2		81.2		81.2		NA		48.7		3.7		6.7		8,410		6,093
20	Riverview Bancorp, Inc. (NASDAQGS:RVSB)		2/2/2024		111.7		11.5		11.4		70.5		85.2		NA		52.2		4.5		8.5		27,621		28,573
21	Provident Bancorp, Inc. (NASDAQCM:PVBC)		2/2/2024		180.2		15.6		15.6		82.1		82.1		NA		NM		0.0		10.7		32,648		78,150
22	Northeast Community Bancorp, Inc. (NASDAQCM:NECB)		2/2/2024		206.9		5.9		5.8		89.4		89.4		-6.4		8.4		1.4		12.4		56,478		80,262
23	Timberland Bancorp, Inc. (NASDAQGM:TSBK)		2/2/2024		219.3		8.6		8.6		92.4		99.0		NA		29.5		3.6		13.5		20,489		25,986
24	Blue Foundry Bancorp (NASDAQGS:BLFY)		2/2/2024		210.9		NM		NM		64.9		65.0		NA		NM		NA		11.6		66,662		92,517
25	Finward Bancorp (NASDAQCM:FNWD)		2/2/2024		104.5		12.4		11.1		70.9		85.8		NA		53.6		2.0		5.1		9,861		4,948
26	OP Bancorp (NASDAQGM:OPBK)		2/2/2024		159.3		6.9		6.9		82.7		87.5		NA		31.0		4.5		7.6		33,364		29,795
27	First Northwest Bancorp (NASDAQGM:FNWB)		2/2/2024		124.1		53.6		14.4		82.0		82.6		NA		107.7		2.0		7.0		11,785		15,137
28	ESSA Bancorp, Inc. (NASDAQGS:ESSA)		2/2/2024		177.2		10.1		9.9		85.6		91.3		NA		32.4		3.2		9.1		22,485		22,913
29	Territorial Bancorp Inc. (NASDAQGS:TBNK)		2/2/2024		86.4		17.7		17.7		35.4		35.4		NA		98.2		2.0		4.4		29,359		29,072
30	Sterling Bancorp, Inc. (Southfield, MI) (NASDAQCM:SBT)		2/2/2024		273.9		35.1		34.9		83.6		83.6		NA		NM		0.0		12.4		33,849		42,341
31	Western New England Bancorp, Inc. (NASDAQGS:WNEB)		2/2/2024		180.1		11.9		11.7		75.8		80.7		NA		40.0		3.4		7.6		54,824		52,182
32	Ponce Financial Group, Inc. (NASDAQGM:PDLB)		2/2/2024		205.0		61.6		NA		82.5		82.5		NA		NM		NA		9.2		52,049		89,647
33	FS Bancorp, Inc. (NASDAQCM:FSBW)		2/2/2024		265.7		7.6		6.8		101.8		110.6		1.1		22.1		3.0		9.7		14,241		20,656
34	Third Coast Bancshares, Inc. (NASDAQGS:TCBX)		2/2/2024		263.3		9.8		9.9		76.1		80.6		NA		NM		NA		6.2		24,093		29,610
35	Hingham Institution for Savings (NASDAQGM:HIFS)		2/2/2024		381.2		14.7		26.9		93.5		93.5		NA		21.0		1.4		9.4		14,851		15,376
36	Southern Missouri Bancorp, Inc. (NASDAQGM:SMBC)		2/2/2024		476.2		11.0		9.4		101.3		126.4		NA		22.0		2.0		13.0		25,296		29,761
37	Northfield Bancorp, Inc. (Staten Island, NY) (NASDAQGS:NFBK)		2/2/2024		512.0		13.4		13.3		73.2		77.8		NA		60.5		4.5		10.0		225,399		196,554
38	TrustCo Bank Corp NY (NASDAQGS:TRST)		2/2/2024		529.1		9.0		8.7		82.0		82.1		NA		46.8		5.2		9.6		81,968		84,610
39	Kearny Financial Corp. (NASDAQGS:KRNY)		2/2/2024		449.9		24.9		13.7		54.9		74.0		NA		151.7		6.1		7.3		314,343		277,917
40	Capitol Federal Financial, Inc. (NASDAQGS:CFFN)		2/2/2024		811.2		NM		16.9		80.2		81.4		NA		NM		5.5		9.0		936,216		931,096
41	Provident Financial Services, Inc. (NYSE:PFS)		2/2/2024		1208.0		9.4		9.0		72.0		98.8		NA		56.1		6.0		9.6		514,428		516,502
42	Northwest Bancshares, Inc. (NASDAQGS:NWBI)		2/2/2024		1529.1		11.3		10.7		98.6		131.3		NA		75.5		6.7		11.0		773,672		716,574
43	WSFS Financial Corporation (NASDAQGS:WSFS)		2/2/2024		2612.2		9.8		9.8		105.4		211.3		NA		13.6		1.4		13.5		296,823		269,531
44	Axos Financial, Inc. (NYSE:AX)		2/2/2024		3032.7		7.9		9.2		145.9		157.0		NA		NM		NA		14.4		878,360		628,519
45	WaFd, Inc (NASDAQGS:WAFD)		2/2/2024		1835.9		8.3		NA		84.7		99.0		NA		29.3		3.5		9.5		326,168		545,975
46	New York Community Bancorp, Inc. (NYSE:NYCB)		2/2/2024		4361.3		1.9		4.2		42.3		60.0		NA		17.3		3.3		6.4		13,431,212		12,683,031
	25% Percentile				57.8		9.2		9.2		71.2		76.1		-9.2		22.1		1.3		7.4		8,144		6,892
	Median				157.0		12.4		11.7		80.2		82.5		-7.5		40.0		2.4		9.4		24,916		28,587
	75% Percentile				398.4		21.9		16.9		87.5		94.8		-3.5		66.7		4.1		12.9		59,024		85,869

Source: S&P Global and FinPro Computations

Price to Earnings – According to the Appraisal Guidelines: “When both the converting institution and the comparable companies are recording “normal” earnings, a P/E approach may be the simplest and most direct method of valuation. When earnings are low or negative, however, this approach may not be appropriate and the greater consideration should be given to the P/BV approach.” In this particular case, the Bank’s earnings are “normal”. As a basis for comparison, the price to core earnings was utilized for both the Bank and the Comparable Group to eliminate any nonrecurring items. As such, this approach was considered in this appraisal.

In the pro forma figures for the Bank, FinPro incorporated the impact of SFAS 123, which requires the expensing of stock options. In preparing the fully converted pro forma figures for the Comparable Group, FinPro also incorporated the impact of SFAS 123.

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Conversion Valuation Appraisal Report

Price to Book/Price to Tangible Book —According to the Appraisal Guidelines: “The P/BV approach works best when the converting institution and the Comparables have a normal amount of book value. The P/BV approach could seriously understate the value of an institution that has almost no book value but has an outstanding future earnings potential. For converting institutions with high net worth, the appraiser may have difficulty in arriving at a pro forma market value because of pressure placed on the P/E multiple as higher P/BV levels are required to reflect a similar P/BV ratio as the peer group average. The P/BV approach also suffers from the use of historical cost accounting data.”

Since thrift earnings in general have had a high degree of volatility over the past decade, the P/B is utilized frequently as the benchmark for market value. A better approach is the P/TB approach. In general, investors tend to price financial institutions on a tangible book basis, because it incorporates the P/B approach adjusted for intangibles. Initially following conversion, FinPro believes that thrifts often trade on a price to tangible book basis.

Price to Assets —According to the Appraisal Guidelines: “This approach remedies the problems of a small base that can occur with the P/BV approach, but the approach has many of the other limitations of the latter approach (the P/BV approach).” FinPro places little weight on this valuation approach due to the lack of consideration of asset and funding mixes and the resulting earnings impact.

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Conversion Valuation Appraisal Report

OFFERING VALUEIN RELATIONTO COMPARABLES

Based upon the premiums and discounts defined in the section above, the Bank’s aggregate pro forma market value at the midpoint is estimated to be $150,000,000. Based upon a range below and above the midpoint value, the relative values are $127,500,000 at the minimum and $172,500,000 at the maximum, respectively. At the super maximum of the estimated value range, the offering value would be $198,375,000.

At the various levels of the estimated value range, the full offering would result in the following offering data:

FIGURE - VALUE RANGE - FULL OFFERING

Conclusion	Total Shares Shares		Price Per Share		Total Value
Appraised Value - Midpoint		15,000,000	$	10.00	$	150,000,000
Range:
- Minimum		12,750,000	$	10.00		127,500,000
- Maximum		17,250,000		10.00		172,500,000
- Super Maximum		19,837,500		10.00		198,375,000

Source: FinPro Inc. Pro Forma Model

This equates to the following multiples:

FIGURE—VALUE RANGE PRICING MULTIPLES

Fidelity Bank

Pro Forma Analysis Sheet - Twelve Months Ended

December 31, 2023

Includes SOP 93-6

	Bank			Comparables						Region						National
				Mean			Median			Mean			Median			Mean			Median
	Min	35.71
Price-Core Earnings Ratio P/E	Mid	37.04			28.90			13.60			50.89			9.86			22.42			11.68
	Max	38.46
	Smax	40.00
	Min	47.92	%
Price-to-Book Ratio P/B	Mid	52.49	%		81.30	%		83.00	%		74.71	%		76.14	%		85.94	%		80.15	%
	Max	56.50	%
	Smax	60.50	%
	Min	48.97	%
Price-to-Tangible Book Ratio P/TB	Mid	53.59	%		85.60	%		86.80	%		78.60	%		80.57	%		96.24	%		82.50	%
	Max	57.60	%
	Smax	61.58	%
	Min	10.33	%
Price-to-Assets Ratio P/A	Mid	11.96	%		9.90	%		9.30	%		12.65	%		12.65	%		11.05	%		9.43	%
	Max	13.55	%
	Smax	15.31	%

Source: FinPro Inc. Pro Forma Model

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Conversion Valuation Appraisal Report

FIGURE - COMPARABLE PRICING MULTIPLESTOTHE BANK’S PRO FORMA MIDPOINT

	Price Relative to
	Earnings			Core Earnings			Book			Tangible Book			Assets
The Bank (at midpoint) Full Conversion		37.04			37.04			52.49	%		53.59	%		11.96	%
Comparable Group Median		13.60			13.60			83.00	%		86.80	%		9.30	%
(Discount) Premium		172.35	%		172.35	%		-36.76	%		-38.26	%		28.60	%

Source: FinPro Calculations

Figure above illustrates that at the midpoint of the estimated valuation range the Bank is priced at a 172.35% premium to the Comparable median price to core earnings multiple. On a tangible book basis, the Bank is priced at a -38.26% discount.

FIGURE - COMPARABLE PRICING MULTIPLESTOTHE BANK’S PRO FORMA SUPERMAXIMUM

	Price Relative to
	Earnings			Core Earnings			Book			Tangible Book			Assets
The Bank (at the supermax) Full Conversion		40.00			40.00			60.50	%		61.58	%		15.31	%
Comparable Group Median		13.60			13.60			83.00	%		86.80	%		9.30	%
(Discount) Premium		194.12	%		194.12	%		-27.11	%		-29.06	%		64.62	%

Source: FinPro Calculations

Figure above illustrates that at the super maximum of the estimated valuation range the Bank is priced at a 194.12% premium to the Comparable median price to core earnings multiple. On a tangible book basis, the Bank is priced at a 29.06% discount.

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Conversion Valuation Appraisal Report

COMPARISONTO RECENT STANDARD CONVERSIONS

As a secondary check FinPro reviewed the pro forma pricing multiples of the Bank relative to the other recent standard conversion pro forma pricing multiples.

Figure–Recent Standard Conversion Offerings

					Offering Data												Financial Performance At Offering
Institution Name	State		Trading Symbol		Offering Completion Date		Offering Announcement Date		Net Proceeds $000s		Pro Forma Price/ Earnings (x)		Pro Forma Price/ Book (%)		Pro Forma Price/ Tangible Book (%)		Total Assets $000s		ROAE (%)			Core ROAE (%)			Tangible Equity/ Tangible Assets (%)		NPAs/ Assets (%)
NB Bancorp, Inc.		MA		NBBK		12/27/2023		6/7/2023		350,682		11.9		60.1		60.2		4,231,792		10.11			9.37			NA		NA
Central Plains Bancshares, Inc.		NE		CPBI		10/19/2023		6/6/2023		34,431		19.2		56.5		56.5		450,407		NA			NA			NA		NA
PFS Bancorp, Inc.		IL		PFSB		10/17/2023		3/6/2023		NA		NA		NA		NA		184,701		3.85			4.81			11.01		NA
SR Bancorp, Inc.		NJ		SRBK		9/19/2023		7/25/2022		75,508		15.7		49.0		57.3		651,486		1.32			1.53			18.74		0.02
ECB Bancorp, Inc.		MA		ECBK		7/27/2022		3/10/2022		75,794		25.9		59.8		59.8		688,639		5.40			7.11			11.42		NA
VWF Bancorp, Inc.		OH		VWFB		7/13/2022		3/3/2022		15,422		250.0		50.2		50.2		137,048		0.11			1.02			17.62		NA
NSTS Bancorp, Inc.		IL		NSTS		1/18/2022		7/19/2021		44,494		NM		59.7		59.7		259,881		0.19			(0.03	)		17.68		0.68
PB Bankshares, Inc.		PA		PBBK		7/14/2021		3/8/2021		23,083		NM		61.7		61.7		281,066		(1.66	)		(0.68	)		7.76		1.04
TC Bancshares, Inc.		GA		TCBC		7/20/2021		3/5/2021		41,777		NM		59.9		59.9		363,624		2.02			4.22			11.14		NA
Texas Community Bancshares, Inc.		TX		TCBS		7/14/2021		3/3/2021		26,776		86.3		53.2		56.0		316,501		2.27			2.27			9.85		NA
Catalyst Bancorp, Inc.		LA				10/12/2021		3/12/2021		44,958		NM		55.5		55.5		238,329		(1.38	)		NA			21.29		1.92
Systematic Savings Bank		MO				10/13/2020		3/18/2020		5,101		62.5		58.7		58.7		39,995		2.18			2.18			12.64		0.08
Eureka Homestead Bancorp, Inc.		LA		ERKH		7/9/2019		3/1/2019		11,311		44.7		60.6		60.6		98,403		2.32			NA			12.52		0.00
Richmond Mutual Bancorporation, Inc.		IN		RMBI		7/1/2019		2/6/2019		111,240		18.9		74.5		74.5		882,800		6.98			6.94			10.10		0.26
CBM Bancorp, Inc.		MD				9/27/2018		5/23/2018		35,785		41.7		73.5		73.5		184,177		0.95			NA			11.95		0.86
Sidney Federal Savings and Loan Association		NE				7/26/2018		10/17/2017		816		NM		71.0		71.0		16,660		(26.09	)		(26.09	)		5.66		0.14
25th Percentile:										19,253		19.0		56.0		56.9		172,395		0.15			0.76			10.32		0.08
Median										35,785		33.8		59.8		59.8		270,474		2.02			2.22			11.69		0.26
Average										59,812		57.7		60.3		61.0		564,094		0.57			1.05			12.81		0.56
75th Percentile:										60,233		58.0		61.1		61.1		500,677		3.09			5.34			16.37		0.86

Source: S&P Global

Figure–Median Pro Forma Price/ TBV Trend

Source: S&P Global and FinPro Computations

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Conversion Valuation Appraisal Report

VALUATION CONCLUSION

It is, FinPro’s opinion that as of February 14, 2024, the estimated aggregate pro forma market value of the Bank was $150,000,000 at the midpoint of a range with a minimum of $127,500,000 to a maximum of $172,500,000 at 15% below and 15% above the midpoint of the range respectively. Assuming an adjusted maximum value of 15% above the maximum value, the adjusted maximum value or super maximum value is $198,375,000. The stock will be issued at $10.00 per share.

Conclusion	Pre Foundation
	Appraised Value
	Minimum			Midpoint			Maximum			SuperMaximum*
Total Shares		12,750,000			15,000,000			17,250,000			19,837,500
Price per Share	$	10		$	10		$	10		$	10
Full Conversion Value	$	127,500,000		$	150,000,000		$	172,500,000		$	198,375,000
Exchange Shares		0			0			0			0
Exchange Percent		0.00	%		0.00	%		0.00	%		0.00	%
Conversion Shares		12,750,000			15,000,000			17,250,000			19,837,500
Conversion Percent		100.00	%		100.00	%		100.00	%		100.00	%
Gross Proceeds	$	127,500,000		$	150,000,000		$	172,500,000		$	198,375,000

The document represents an initial valuation for the Bank. Due to the duration of time that passes between the time this document is compiled and the time the offering closes, numerous factors could lead FinPro to update or revised the appraised value of the Bank. Some factors that could lead FinPro to adjust the appraised value include: (1) changes in the Bank’s operations and financial condition; (2) changes in the market valuation or financial condition of the Comparable Group; (3) changes in the broader market; and (4) changes in the market for thrift conversions. Should there be material changes to any of these factors, FinPro will prepare an appraisal update to appropriately adjust the value of the Bank. At the time of closing, FinPro will prepare a final appraisal to determine if the valuation range is still appropriate and determine the exact valuation amount appropriate for the Bank.

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Conversion Valuation Appraisal Report

7. Exhibits

Exhibit 1. Pro Forma Regulatory Capital Ratios

	Historical					Minimum 12,750,000					Midpoint 15,000,000					Maximum 17,250,000					Adj. Maximum 19,837,500
	$		%			$		%			$		%			$		%			$		%
GAAP Capital	$	156,737		13.9	%	$	203,769		17.4	%	$	212,221		18.0	%	$	220,672		18.6	%	$	230,392		19.2	%
Tier 1 Leverage Capital	$	166,340		14.8	%	$	213,372		18.2	%	$	221,824		18.8	%	$	230,275		19.4	%	$	239,995		20.0	%
Tier 1 Leverage Requirement	$	56,186		5.0	%	$	58,538		5.0	%	$	58,960		5.0	%	$	59,383		5.0	%	$	59,869		5.0	%
Excess	$	110,154		9.8	%	$	154,834		13.2	%	$	162,864		13.8	%	$	170,892		14.4	%	$	180,126		15.0	%
Tier 1 Risk based	$	166,340		22.7	%	$	213,372		28.7	%	$	221,824		29.8	%	$	230,275		30.9	%	$	239,995		32.1	%
Risk-Based Capital Requirement	$	58,690		8.0	%	$	59,442		8.0	%	$	59,577		8.0	%	$	59,713		8.0	%	$	59,868		8.0	%
Excess	$	107,650		14.7	%	$	153,930		20.7	%	$	162,247		21.8	%	$	170,562		22.9	%	$	180,127		24.1	%
Total Risk-Based Capital	$	172,543		23.5	%	$	219,575		29.6	%	$	228,027		30.6	%	$	236,478		31.7	%	$	246,198		32.9	%
Risk-Based Capital Requirement	$	73,362		10.0	%	$	74,303		10.0	%	$	74,472		10.0	%	$	74,641		10.0	%	$	74,835		10.0	%
Excess	$	99,181		13.5	%	$	145,272		19.6	%	$	153,555		20.6	%	$	161,837		21.7	%	$	171,363		22.9	%
Common Equity Tier 1 Risk-Based	$	166,340		22.7	%	$	213,372		28.7	%	$	221,824		29.8	%	$	230,275		30.9	%	$	239,995		32.1	%
Common Equity Tier 1 Risk-Based
Requirement	$	47,685		6.5	%	$	48,297		6.5	%	$	48,407		6.5	%	$	48,516		6.5	%	$	48,643		6.5	%
Excess	$	118,655		16.2	%	$	165,075		22.2	%	$	173,417		23.3	%	$	181,759		24.4	%	$	191,352		25.6	%
Reconcilation of Capital Infused into the bank:
50% of Net Proceeds						$	62,332				$	73,484				$	84,635				$	97,460
Less: ESOP						-$	10,200				-$	12,000				-$	13,800				-$	15,870
Less: MRP						-$	5,100				-$	6,000				-$	6,900				-$	7,935
Pro Forma Increase						$	47,032				$	55,484				$	63,935				$	73,655

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Conversion Valuation Appraisal Report

Exhibit 2. Pro Forma Analysis Sheet

				Company Pro Forma Based Upon Sale at $10.00 Per Share
	Bank Historical			12,750,000 Shares (Minimum of Estimated Price Range)			15,000,000 Shares (Midpoint of Estimated Price Range)			17,250,000 Shares (Maximum of Estimated Price Range)			19,837,500 Shares (15% above Max of Estimated Price Range)
	(In thousands)
Deposits	$	769,288		$	769,288		$	769,288		$	769,288		$	769,288
Borrowings		172,200			172,200			172,200			172,200			172,200
Total Deposits and Borrowings	$	941,488		$	941,488		$	941,488		$	941,488		$	941,488
Stockholders’ equity:
Preferred	$	—		$	—		$	—		$	—		$	—
Common		—			128			150			173			198
APIC		—			124,536			146,817			169,097			194,721
Retained Earnings		172,126			172,126			172,126			172,126			172,126
Net unrealized g/(l) on AFS, net		(15,389	)		(15,389	)		(15,389	)		(15,389	)		(15,389	)
Plus:
Amount of the foundation		—			—			—			—			—
Less:
Capital to the MHC		—			—			—			—			—
After Tax Expense of foundation		—			—			—			—			—
Less:
CS acquired by old ESOP		—			—			—			—			—
CS acquired by old MRP		—			—			—			—			—
CS to be acquired by ESOP		—			(10,200	)		(12,000	)		(13,800	)		(15,870	)
CS to be acquired by MRP		—			(5,100	)		(6,000	)		(6,900	)		(7,935	)
Total Stockholder’s equity	$	156,737		$	266,101		$	285,704		$	305,307		$	327,851
Total Shares Outstanding					12,750,000			15,000,000			17,250,000			19,837,500
MHC Shares					—			—			—			—
Minority Shares					—			—			—			—
Foundation Shares					—			—			—			—
Equity to Assets		13.93	%		22.04	%		23.28	%		24.49	%		25.83	%
Equity to Tangiable Assets		15.18	%		22.14	%		23.39	%		24.60	%		25.95	%

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Conversion Valuation Appraisal Report

Exhibit 3. Pro Forma Analysis Sheet

Prior Twelve Mos. Earning Base	Y
Period Ended December 31, 2023		$	1,118	(1)
Pre-Conversion Book Value	B
As of December 31, 2023		$	156,737
Pre-Conversion Assets	A
As of December 31, 2023		$	1,124,932
Return on Money	R		3.94%	(2)
Conversion Expenses		$	3,033
	X		2.02%	(3)
Proceeds Not Invested		$	18,000	(4)
Estimated ESOP Borrowings		$	12,000
ESOP Purchases	E		8.00%	(5)
Cost of ESOP Borrowings		$	480	(5)
Cost of ESOP Borrowings	S		0.00%	(5)
Amort of ESOP Borrowings	T		25	Years
Amort of MRP Amount	N		5	Years
Estimated MRP Amount		$	6,000	(6)
MRP Purchases	M		4.00%
MRP Expense		$	1,200
Stock Foundation Amount		$	—	(7)
Stock Foundation Amount	F		0.00%0.00%
Foundation Opportunity Cost		$	—
Tax Benefit	Z	$	—	(8)
Tax Rate	TAX		19.00%
Percentage Sold	PCT		100.00%
Amount to be issued to Public		$	150,000	(9)
Earnings Multiple			12

(1) Net income for the twelve months ended December 31, 2023.

(2) Net Return assumes a reinvestment rate of 4.87 percent (the 1 year Treasury at December 31, 2023), and a tax rate of 19%.

(3) Conversion expenses reflect estimated expenses as presented in the offering document.

(4) Includes Stock from ESOP and MRP.

(5) Assumes ESOP is amortized straight line over 25 years.

(6) Assumes MRP is amortized straight line over 5 years.

(7) Not applicable.

(8) Not Applicable.

(9) The amount to be offered to public.

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Conversion Valuation Appraisal Report

Exhibit 4. Pro Forma Effect of Conversion

		Pro Forma Effect of Conversion Proceeds As of December 31, 2023 (Dollars in Thousands)
Conversion Proceeds		Minimum			Midpoint			Maximum			SuperMax
Total Shares Offered			12,750,000			15,000,000			17,250,000			19,837,500
Conversion Shares Offered			12,750,000			15,000,000			17,250,000			19,837,500
Price Per Share		$	10		$	10		$	10		$	10
Gross Proceeds		$	127,500		$	150,000		$	172,500		$	198,375
Plus: Value issued to Foundation	(9)		—			—			—			—
Pro Forma Market Capitalization			127,500			150,000			172,500			198,375
Gross Proceeds			127,500			150,000			172,500			198,375
Less: Est. Conversion Expenses			(2,836	)		(3,033	)		(3,230	)		(3,456	)
Net Proceeds			124,664			146,967			169,270			194,919
Cash issued to foundation			—			—			—			—
Less: ESOP Adjustment	(3)		(10,200	)		(12,000	)		(13,800	)		(15,870	)
Less: MRP Adjustment	(3)		(5,100	)		(6,000	)		(6,900	)		(7,935	)
Net Proceeds Reinvested		$	109,364		$	128,967		$	148,570		$	171,114
Estimated Incremental Rate of Return			3.94	%		3.94	%		3.94	%		3.94	%
Estimated Incremental Return		$	4,309		$	5,081		$	5,854		$	6,742
Less: Cost of ESOP	(4)		—			—			—			—
Less: Amortization of ESOP	(7)		(330	)		(389	)		(447	)		(514	)
Less: Option Expense	(10)		(946	)		(1,113	)		(1,280	)		(1,472	)
Less: MRP Adjustment	(7)		(826	)		(972	)		(1,118	)		(1,285	)
Pro-forma Net Income			2,207			2,607			3,009			3,471
Earnings Before Conversion			1,118			1,118			1,118			1,118
Earnings Excluding Adjustment			3,325			3,725			4,127			4,589
Earnings Adjustment	(6)		—			—			—			—
Earnings After Conversion		$	3,325		$	3,725		$	4,127		$	4,589

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Conversion Valuation Appraisal Report

		Pro Forma Effect of Conversion Proceeds As of December 31, 2023 (Dollars in Thousands)
		Minimum			Midpoint			Maximum			SuperMax
Pro-forma Tangible Equity
Equity at December 31, 2023		$	156,737		$	156,737		$	156,737		$	156,737
Net Conversion Proceeds			124,664			146,967			169,270			194,919
Plus: MHC Adjustment	(7)		—			—			—			—
Plus: Value issued to Foundation			—			—			—			—
Less: After Tax Expense of Foundation			—			—			—			—
Less: ESOP Adjustment	(1)		(10,200	)		(12,000	)		(13,800	)		(15,870	)
Less: MRP Adjustment	(2)		(5,100	)		(6,000	)		(6,900	)		(7,935	)
Pro-forma Equity		$	266,101		$	285,704		$	305,307		$	327,851
Less: Intangible	(5)		5,786			5,786			5,786			5,786
Pro-forma Tangible Equity		$	260,315		$	279,918		$	299,521		$	322,065
Pro-forma Assets
Total Assets at December 31, 2023		$	1,124,932		$	1,124,932		$	1,124,932		$	1,124,932
Net Conversion Proceeds			124,664			146,967			169,270			194,919
Plus: MHC Adjustment	(7)		—			—			—			—
Plus: Value issued to Foundation			—			—			—			—
Less: After Tax Expense of Foundation			—			—			—			—
Less: ESOP Adjustment	(1)		(10,200	)		(12,000	)		(13,800	)		(15,870	)
Less: MRP Adjustment	(2)		(5,100	)		(6,000	)		(6,900	)		(7,935	)
Pro-forma Total Assets			1,234,296			1,253,899			1,273,502			1,296,046
Stockholder’s Equity Per Share *
Equity at December 31, 2023		$	12.29		$	10.45		$	9.09		$	7.90
Estimated Net Proceeds			9.78			9.80			9.81			9.83
Plus: MHC Adjustment			—			—			—			—
Plus: Value issued to Foundation			—			—			—			—
Less: After Tax Expense of Foundation			—			—			—			—
Less: ESOP Stock			(0.80	)		(0.80	)		(0.80	)		(0.80	)
Less: MRP Stock			(0.40	)		(0.40	)		(0.40	)		(0.40	)
Pro-forma Equity Per Share *			20.87			19.05			17.70			16.53
Less: Intangible			0.45			0.39			0.34			0.29
Pro-forma Tangible Equity Per Share *		$	20.42		$	18.66		$	17.36		$	16.24

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Conversion Valuation Appraisal Report

		Pro Forma Effect of Conversion Proceeds As of December 31, 2023 (Dollars in Thousands)
		Minimum			Midpoint			Maximum			SuperMax
Net Earnings Per Share *
Historical Earnings Per Share	(8)	$	0.09		$	0.08		$	0.07		$	0.06
Incremental return Per Share	(8)		0.37			0.37			0.37			0.37
ESOP Adjustment Per Share	(8)		(0.03	)		(0.03	)		(0.03	)		(0.03	)
Option Expense Per Share	(10)		(0.08	)		(0.08	)		(0.08	)		(0.08	)
MRP Adjustment Per Share	(8)		(0.07	)		(0.07	)		(0.07	)		(0.07	)
Normalizing Adjustment Per Share			—			—			—			—
Pro Forma Earnings Per Share *	(8)	$	0.28		$	0.27		$	0.26		$	0.25
Shares Utilized for EPS			11,770,800			13,848,000			15,925,200			18,313,980
Pro-forma Ratios
Price/EPS No Adjustment			35.71			37.04			38.46			40.00
Price/EPS with Adjustment			35.71			37.04			38.46			40.00
Price/Book Value per Share			47.92	%		52.49	%		56.50	%		60.50	%
Price/Tangible Book Value			48.97	%		53.59	%		57.60	%		61.58	%
Market Value/Assets			10.33	%		11.96	%		13.55	%		15.31	%

* The totals for the per share data are actual figures rounded to two decimals. The component parts may not add to the total due to rounding.

(1) ESOP Borrowings are deducted from net worth and assets, and amortized over 25 years.

(2) MRP is omitted from net worth and assets, and amortized over 5 years.

(3) Consists of ESOP and MRP amortization.

(4) The ESOP loan is from the Holding Company and therefore, there are no costs.

(5) NA

(6) Not applicable.

(7) ESOP and MRP are amortized over 25 and 5 years respectively, and tax impacted at 19%.

(8) All EPS computations are done in accordance with SOP 93-6.

(9) Not applicable.

(10) Assumed option expense in accordance with SFAS No. 123.

Exhibit 5. Use of Proceeds

Use of Proceeds	12,750,000 Shares			% of Gross Proceeds			15,000,000 Shares			Gross Proceeds			17,250,000 Shares			Gross Proceeds			19,837,500 Shares			Gross Proceeds
Gross Offering Proceeds	$	127,500					$	150,000					$	172,500					$	198,375
Less: Expense		(2,836	)					(3,033	)					(3,230	)					(3,456	)
Net Proceeds	$	124,664			100.0	%	$	146,967			100.0	%	$	169,270			100.0	%	$	194,919			100.0	%
Less:
Proceeds to Bank		(62,332	)		-50.0	%		(73,484	)		-50.0	%		(84,635	)		-50.0	%		(97,460	)		-50.0	%
ESOP		(10,200	)		-8.2	%		(12,000	)		-8.2	%		(13,800	)		-8.2	%		(15,870	)		-8.1	%
Cash to Foundation		—			0.0	%		—			0.0	%		—			0.0	%		—			0.0	%
Cash to MHC		—			0.0	%		—			0.0	%		—			0.0	%		—			0.0	%
Proceeds for HC		52,132			41.8	%		61,483			41.8	%		70,835			41.9	%		81,589			41.9	%